(Adds offer details, Zenotech reaction, MUMBAI to dateline)
TOKYO/MUMBAI Jan 19 (Reuters) - Japanese drugmaker Daiichi Sankyo (4568.T) will make an open offer for up to 20 percent of Zenotech Laboratories (ZENL.BO), a unit of India's Ranbaxy, but the target firm said the offer was lower than expected and its shares fell sharply.
Daiichi Sankyo acquired a 63.9 percent stake in Ranbaxy Laboratories (RANB.BO) last year. Ranbaxy owned nearly 47 percent of Zenotech as at Sept. 30, according to stock exchange data, and Daiichi's open offer was required under Indian law.
Daiichi Sankyo will buy up to 6.9 million shares at 113.62 rupees ($2.3) each under the offer, which will run from Feb. 13 to March 13, lead manager ICICI Securities said in a statement.
The stake could cost the Japanese drug maker up to 782.3 million rupees ($16.1 million).
Zenotech's managing director, Jayaram Chigurupati, said Daiichi had agreed to offer 160 rupees per share last July before withdrawing the offer "at the very last minute".
He called upon market regulator Securities and Exchange Board of India (SEBI) to review the issue.
"I hope SEBI does not turn a blind eye to the minority shareholders of Zenotech," Chigurupati said in a statement.
Zenotech shares fell 10.9 percent to 98.05 rupees on Monday, in a Mumbai market .BSESN that ended almost flat.