The pricing of the proposed offer will be determined as per the Sebi formula laid down and sources say that the proposed placement will put Lyka Labs ``in a different orbit.''

As per Sebi guidelines, the issue of shares on a preferential basis can be made at a price not less than the higher of the average of the weekly high and low of the closing prices of the shares quoted on the stock exchange during the six months preceding the relevant date or the average of the weekly high and low of the closing prices of the shares quoted on the stock exchange during the two weeks preceding the relevant date.

Significantly, the Lyka Labs scrip has been on the upward run for the past few months on the bourses. The stock which had been moving in the Rs 45-48.55 range in mid-December, 1999, went up to around Rs 83 by December 27. It, however, fell to Rs 49 by January 31 and closed at Rs 100.95 on the BSE on February 18, 2000.

The promoter group controls 50 to 60 per cent of Lyka Laboratories equity capital of Rs 6.37 crore as on March 31, 1999. The company is known for well-known brands like Sensur and Alex anti-cough range.

Lyka had earlier said that it plans to consolidate its presence in the anti-infectives segment and had proposed to expand into areas like the respiratory, allergic disorders, anti-ulcerants, antacids and anti-oxidants segment.

The company had, in the year ended March 31, 1999, suffered a minor setback in the domestic market due to ``over-dependence on semi synthetic penicillin-based products'' which are being replaced by newer molecules.