With the sale, the total shareholding of the insurer has come down to 5.6 per cent, Merck Ltd said in a BSE filing.
LIC earlier had 12,74,823 shares in the company constituting 7.68 per cent stake. It sold 3,43,147 shares totalling 2.06 per cent.
The stock surged to a 52-week high of Rs 1,687.30 and trading volume soared over 7.25 times in day trade on BSE.
Over 5.5 lakh shares of the company were traded on both NSE and BSE stock exchanges.
The stock was trading up by 19.48 per cent at Rs 1,680 on BSE. The scrip was trading higher by 18.80 per cent at Rs 1,670.00 on NSE at 1450 hrs.