On Monday, the Ranbaxy counter clocked combined volumes of 39.92 lakh shares on the BSE and NSE, up from 33.95 lakh shares on July 2. The counter closed higher at Rs 665 on the BSE from Rs 657 its previous close. On the NSE, the scrip closed at Rs 674, up from its previous close of Rs 657.90.

Though analysts do not expect any immediate change in the strategic direction that Ranbaxy will pursue, they maintained that the next six months would test the "effectiveness of a Ranbaxy management, without Parvinder Singh". They also added that the current price levels were also based on expectations of the announcement of major licensing deals on the R&D front, in particular the proposed alliance with Bayer AGfor a new drug delivery system (NDDS) for ciprofloxacin. There is further speculation of a possible NDDS for ceftazidime for Glaxo, though there is no official word on this.

"The equations between the family and the people heading the company could become significant, though Ranbaxy's strategic direction is unlikely to change," said an analyst with Birla Marlin Securities.

Another analyst with a leading Indian stock broking house maintained that the "power equations" within the Delhi-based drug giant could play a vital role in ensuring a smooth transition. "The challenge could lie in how CEO DS Brar manages key team members like VK Kaul and JM Khanna, though there is no reason to believe that smooth functioning, at the top management level, would be affected," he said. Effective management could be vital in deterring talent poachers, he added.

However, another analyst with an Indian stockbroking firm said that Parvinder Singh may have resolved many of the difficult issues prior to the appointment ofBrar as Ranbaxy's next CEO and managing director. "I don't think the succession issue will end in an ugly boardroom tussle and any short-term weakness in the scrip could be compared with what happened to Thermax under similar circumstances," he said.

Drawing parallels with what occured in Thermax and Asian Paints, BSE broker Dilip Bhat said, "Although, Parvinder Singh set the horse in its seat, the exit has been very sudden. Ranbaxy will face a phase of uncertainity for the next 3-6 months and if the company continues to grow in this period of uncertainity, it will be on a strong footing. A lot depends on the reported $40 million deal with Bayer". Marketmen also attributed the interest in the Ranbaxy counter to rumours of a possible private placement (of over 25 per cent of the equity) at Rs 800 per share to a multinational.