This is probably the second major block of Sol Pharma shares that has been offloaded/attempted to be sold in the recent past. Maharashtra's leading financial development institution Sicom had put on sale its block of 1.1 million equity shares in Sol.

These shares were received as collateral for a Rs 5-crore loan extended to Sol Pharma. Sicom's 1.1 million equity shares translate into a holding of over 8 per cent of Sol Pharma's equity. Sicom, it is believed, is yet to sell these shares.

Dr Reddy's spokesperson confirmed the divestment and said the company had divested "more shares of Sol Pharma" since March 31, 1998, but added "the amount will reflect in the balance sheet of1998-99".

Market sources, however, said that the Rs 335-crore Dr Reddy's had, over the past few months, disposed of its holding in Sol Pharma, though this could not be officially confirmed. Sol Pharma's equity stood at around Rs 12.7 crore for the year ended March 31, 1998.

Dr Reddy's has sold 5,03,500 equity shares of the Hyderabad-based Sol Pharma, bringing its holding down to 2.5 per cent (2,99,100 equity shares) as on March 31, 1998, against 8,02,600 shares held by it in Sol Pharma as on March 31, 1997.

When asked about the price at which these shares were sold, officials said this was done at the "prevailing market price". The lacklustre Sol Pharma scrip was seen moving in the Rs 5.40 to Rs 6 range on Tuesday on the Bombay Stock Exchange.

Sol Pharma, now a Board for Industrial & Financial Reconstruction (BIFR) case, registered sales of Rs 14.36 crore for the six months ended March 31, 1998, while losses were Rs 99.50 crore during the period. The company, which is going through a rough patch,plans to hive off its manufacturing facility at Pantancheru in Andhra Pradesh into a joint venture with the $1.5-billion Teva Pharmaceutical Industries of Israel.