The GlaxoSmithKline building is pictured in Hounslow, west London. (Reuters) Reuters

British pharmaceutical major GlaxoSmithKline is looking to raise stake in its Indian unit by 25% through an open offer, as the company tries to expand its presence in high-growth emerging markets.

The company said it would raise its stake in India-listed GlaxoSmithKline Pharmaceuticals from 50.7% to up to 75% by way of an open offer worth about £629m ($1bn, €745m).

Following the announcement, the company's shares surged about 19% in Indian stock markets.

In the voluntary open offer, the parent company will pay 3,100 Indian rupees for each of the 20,609,774 shares it intends to buy. The shares are listed on India's Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The shares are trading up 18.94% at 2,936 rupees on the BSE, and up 19.26% at 2,934.05 on the NSE.

Nevertheless, GSK intends to keep its Indian unit publicly listed with more than 25% shareholding remaining with the public. Securities regulations in India require a minimum public shareholding of 25% for a company to maintain the public-listed status.

The offer represents a premium of about 26% to the company's closing share price on the National Stock Exchange of India on 13 December. The unit's stock has appreciated about 19% over the last 12 months.

GSK expects to begin the open offer in February 2014, subject to regulatory approvals.

Expansion in Emerging Markets

"For GSK this transaction will increase exposure to a strategically important market and for our Indian pharmaceuticals subsidiary's shareholders we believe it offers a good liquidity opportunity at an attractive premium," David Redfern, GSK's chief strategy officer, said in a statement.

GSK intends to fund the transaction through its existing cash resources. The transaction is expected to be earnings neutral for the first year and accretive thereafter.

The Indian unit, which employs more than 5,000 people, generated about £313m in turnover and about £116m in pre-tax profit in the financial year ended 31 December, 2012.

In February, GSK increased its stake in its publicly-listed Indian consumer healthcare subsidiary, GlaxoSmithKline Consumer Healthcare, to 72.5% from 43.2% by spending about $901m.

The deals indicate that the British drug-maker is more reliant on the high-growth emerging markets than the traditional western markets, where its sales are declining due to intense competition.