Life Insurance Corporation of India (LIC), the country's largest institutional investor, has increased its shareholding in pharmaceutical major Dr. Reddy's Laboratories Ltd over the last 7-8 months. Through a series of open market purchases, LIC acquired an additional 1,67,89,472 equity shares, representing 2.012% of Dr. Reddy's total paid-up capital. This acquisition has raised LIC's total stake in the Hyderabad-based drugmaker to 8.216% from the previous 6.204%.
The transactions occurred between October 28, 2024, and June 3, 2025, as per a regulatory filing made with the stock exchanges on June 4, 2025. The disclosure was made under Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
| Particulars | Number of Shares / Voting Rights | % of Total Share/Voting Capital |
|---|---|---|
| Holding Before Acquisition (as of October 27, 2024, or prior) | 5,17,69,600 | 6.204% |
| Shares Acquired (October 28, 2024 - June 3, 2025) | 1,67,89,472 | 2.012% |
| Holding After Acquisition (as of June 3, 2025) | 6,85,59,072 | 8.216% |
The Acquisition in Detail
The disclosure document reveals that Life Insurance Corporation of India executed these acquisitions through "MARKET PURCHASE" on the National Stock Exchange (NSE) and BSE, where Dr. Reddy's Laboratories' shares are listed. Prior to this series of acquisitions, LIC held 5,17,69,600 shares, amounting to a 6.204% stake in Dr. Reddy's. The recent purchase of 1,67,89,472 additional shares has now taken its total holding to 6,85,59,072 shares.
The total equity share capital, or total voting capital, of Dr. Reddy's Laboratories Ltd. considered for these calculations stands at 83,44,55,365 shares. The filing confirmed that the acquirer, LIC, does not belong to the Promoter or Promoter group of Dr. Reddy's Laboratories Ltd. The disclosure also noted that the total diluted share/voting capital of the Target Company (TC) after the said acquisition remains 'NA' (Not Applicable) in the context of this specific filing, implying no immediate impact from other convertible instruments on this reported percentage holding.
The acquisition of shares was entirely in the form of equity shares carrying voting rights. There were no voting rights (VR) acquired otherwise than by shares, nor any warrants or convertible securities involved in this specific transaction that would entitle LIC to receive further shares carrying voting rights in Dr. Reddy's.
Regulatory Context: SEBI Disclosure Norms
This disclosure by LIC is in compliance with Regulation 29(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, often referred to as the SEBI SAST Regulations. This particular regulation mandates that any acquirer who, along with persons acting in concert (PACs), holds 5% or more of the shares or voting rights in a target company, must disclose any subsequent acquisition or disposal of shares or voting rights representing 2% or more of the target company's share or voting capital.
In this case, LIC, already holding more than 5% in Dr. Reddy's, acquired an additional 2.012%, thereby triggering the disclosure requirement. Such regulations are crucial for maintaining transparency in the securities market, ensuring that all stakeholders are informed about significant changes in shareholding patterns of listed companies, which can influence market dynamics and corporate governance.
About the Acquirer: Life Insurance Corporation of India (LIC)
Life Insurance Corporation of India is a statutory corporation established under the Life Insurance Corporation Act, 1956. It is the largest life insurer in India and a significant institutional investor in the Indian equity markets. LIC's investment portfolio is vast and diversified across various sectors. Its investment decisions are closely watched by the market as they often reflect long-term confidence in the investee companies. As a major player, LIC's investment activities contribute significantly to market stability and depth.
About the Target Company: Dr. Reddy's Laboratories Ltd.
Dr. Reddy's Laboratories Ltd. is a multinational pharmaceutical company based in Hyderabad, Telangana, India. The company offers a portfolio of products and services including Active Pharmaceutical Ingredients (APIs), custom pharmaceutical services, generics, biosimilars, and differentiated formulations. Dr. Reddy's is a well-established name in the global pharmaceutical landscape, with operations and markets across various geographies. Shares of Dr. Reddy's Laboratories Ltd. are actively traded on major Indian stock exchanges like the BSE Ltd. and the National Stock Exchange of India Ltd. (NSE).
Implications of the Stake Increase
The increase in LIC's stake in Dr. Reddy's Laboratories is a noteworthy development. Such moves by large institutional investors like LIC are generally perceived by the market as a vote of confidence in the company's fundamentals, long-term growth prospects, and management quality. The acquisition, spread over several months, suggests a strategic accumulation rather than a speculative trade.
For Dr. Reddy's, the increased holding by a stable, long-term investor like LIC can be seen as a positive endorsement. It may also provide greater stability to the company's shareholding pattern. While the immediate operational impact on Dr. Reddy's is yet to be ascertained, the enhanced investor confidence can be beneficial for the company's market perception and future capital-raising efforts, if any. The market will continue to monitor LIC's investment patterns as they often provide insights into the institutional outlook on various sectors and companies within the Indian economy.
The disclosure was formally made by the Assistant Secretary (Investment- Back Office) of LIC from its Central Office in Mumbai, and copies were sent to both BSE Ltd. and NSE Ltd., in addition to Dr. Reddy's Laboratories Ltd.
