HYDERABAD: Is Kallam Anji Reddy, chairman of Dr Reddy’s Laboratories Ltd (DRL), easing his grip on the company he founded way back in 1984? If the latest shareholding structure is anything to go by, Reddy owns no more stake in DRL in his individual capacity.As of Sept. 2011, the pharma pioneer had a 0.35 per cent stake in DRL.This has fallen to zero as of Dec. 2011, as per the company’s shareholding data published on the Bombay Stock Exchange website. On Nov. 14, 2011, Dr Reddy sold all his remaining 600,956 crore equity shares to Dr Reddy’s Holdings Pvt Ltd -- part of DRL’s promoter group -- for Rs 98.36 crore.The deal assumes significance as the transaction was made through an open-market purchase although other options like share transfer or gifting of shares to family members existed.“Although Reddy has sold shares and the dilution is insignificant in terms of the percentage, it’s unclear if he has hiked his personal stake in the holding company,” said Shiva Shanker, chief strategist of EffortsCapital, told Express.DRL declined comment as the transaction was deemed personal.Incidentally, just a few days before the sale, the holdings company raised unsecured NCDs aggregating to Rs 100.17 crore.Sources said Reddy has about 40 per cent stake in DRL Holdings, while Prasad (alongwith wife Anuradha) and Satish Reddy hold about 30 per cent each.The move comes at a time when the market is abuzz that differences are widening between the current management and the founder over the change in the company’s business direction.While Anji Reddy is passionate about discovering new drugs, the management seems to be adopting a cautious approach, having folded up the drug discovery programmes initiated by Anji Reddy in areas like diabetes and cardiovascular diseases. These include the path-breaking cardiovascular drug -- CETP inhibitor -- which Reddy excitedly spoke of in 2010.DRL has also shelved a type 2 diabetes molecule -- balaglitazone -- after nine years of R&D. Interestingly, balaglitazone (named after Lord Balaji) was the first lead molecule to come out of DRL’s drug discovery research programme, which started in 1994.The other members in the promoter group, including G V Prasad, K Satish Reddy and K Samrajyam, continue to hold individual stakes of 0.79%, 0.71% and 0.66% respectively.Dr Reddy’s Holdings controls 23.43 per cent. Together, the promoters have 25.61 per cent. “The total promoters’ holding as a percentage of the total equity is not quite strong. FIIs being the majority shareholders, the company is vulnerable to a takeover threat,” said Shanker producer.Meteoric Rise Son of a turmeric farmer, Dr K Anji Reddy, started the now $1.75 billion company with an initial capital of Rs 25 lakh way back in 1984.Hailing from Guntur, Anji Reddy steered the company into the niche but risky area of drug discovery, making it one of the first pharma companies in the country to focus on drug development. Over the past three decades, he led the company’s emergence as the country’s second largest drug producer .
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