Mumbai, April 8: Raghavendra Rao, founder of Orchid Chemicals & Pharmaceuticals Ltd, appears to be looking down the barrel of a gun as the promoters of Ranbaxy have raised their stake in the pharmaceutical company from 8 per cent to 12.8 per cent.

Early in the day, rumours swirled that Rao was preparing to hold talks with the Ranbaxy promoters to gauge their interest in his company and their intentions. However, this was later denied.

In a notification issued to the NSE on Monday, Orchid Chemicals said Solrex — the company owned by the Ranbaxy promoters — held a little over 53 lakh shares, or 8.06 per cent of its equity. The privately held company, floated by the promoters of Ranbaxy, had acquired most of these shares in transactions between late March and early April.

However, it is now understood that Solrex purchased more shares on Monday on both the exchanges, raising its stake to nearly 12.8 per cent. On the BSE, Solrex bought nearly 9.72 lakh shares at an average price of Rs 196.13 per share. Although the Orchid Chemicals’ counter witnessed block deals on the stock exchanges today as well, it could not be ascertained whether Solrex was a buyer in these transactions.

The stock was on fire today as well and gained nearly 16 per cent to close at Rs 239.95.

“The stock rose because of the stake purchase by the Ranbaxy group. If the group acquires the firm, it will be highly positive for Orchid Chemicals,” a broker said. If Solrex raises its stake to 15 per cent, it can come out with an open offer. There is no indication from Rao whether he sees it as a hostile bid for his company.

The promoters of Orchid have only a 16 per cent stake. The rest of the shareholding is dispersed among mutual funds (6.98 per cent), financial institutions and banks (9.70 per cent), foreign institutional investors (18.65 per cent) and corporate bodies (10.14 per cent), retail shareholders and other entities.

Market circles feel that the low promoter holding and attractive share price can make the Rs 934-crore Orchid Chemicals an attractive takeover target.