Dr Reddy's to raise Rs 1,027 crore through additional ADS issue

Mumbai: Dr Reddy's Laboratories Ltd will raise Rs 1,027 crore by issuing an additional lot of 1,800,000 American depository shares (ADS) to the underwriters at a public offer price of $16 per ADS.

This is in exercise of the over-allotment option that the company had granted to the underwriters, in a previously announced offer completed on November 22. 14,300,000 ADS have been issued under the offer (including this issuance), the company said in a filing with the Bombay Stock Exchange (BSE).

Each ADS represents one DRL share of face value Rs 5. The pharma company's stock surged 0.89 per cent and was trading at Rs 741.20 on the BSE.

Earlier, on November 16, the company had raised Rs 898.47 crore ($200 million) through a 12.5 million ADS issue (excluding the underwriters over-allotment option) at $16 per ADS.

The final prospectus supplement was filed with the US Securities and Exchange Commission on November 17 and the offer was completed on November 22. The underwriters had the option to purchase up to an additional 1,800,000 ADS within 30 days starting November 22, 2006.

The pharma major intends to use the funds for various corporate purposes such as potential acquisitions, investments in joint ventures and subsidiaries and for increasing production capacities.