Novartis has launched an offer to increase its stake in the Swiss major’s Indian subsidiary in a deal that is valued at around 4.4 billion Indian rupees, or $87 million.

The firm currently has a 50.9% stake in Novartis India and is looking to boost that to around 90%. The offer, which is expected to open in May, is 351 rupees per share, a premium of 27% on Novartis India's closing price on March 24, or up 35% over its average price during the last month.

Upping the stake to 90% would allow Novartis to delist the unit from the Bombay Stock Exchange if it so desires. The announcement of the offer sent Novartis India stock up nearly 20% to nearly 331 rupees and some observers believe that the Basel-based group’s bid is on the low side and may not be tempting enough for shareholders.

The move makes sense for Novartis as it can take advantage of the lower share prices created by the financial crisis to boost its stake. The deal will also strengthen its position in India, one of the fastest-growing pharmaceutical markets in the world.

Retail drug sales in India in February were up 13.3% over the same month last year to 2,853 crore (about $5.62 billion), according to data from ORG IMS. Cipla continues to hold the top position, followed by Ranbaxy, GlaxoSmithKline and Piramal Healthcare.