Dr Reddy's Laboratories lost 2.17% to Rs 2,042.55 at 10:42 IST on BSE after the company said a law firm representing a purported investor in the company filed a purported class action lawsuit against the company.
The announcement was made during market hours today, 28 August 2017.Meanwhile, the S&P BSE Sensex was up 168.46 points or 0.53% at 31,762.20.
On the BSE, 41,000 shares were traded on the counter so far as against the average daily volumes of 54,579 shares in the past one quarter. The stock had hit a high of Rs 2,089 and a low of Rs 2,029.70 so far during the day. The stock had hit a 52-week high of Rs 3,394.95 on 28 October 2016 and a 52-week low of Rs 1,901.65 on 11 August 2017.
The stock had underperformed the market over the past one month till 24 August 2017, sliding 22.45% compared with the Sensex's 2.02% fall. The stock had also underperformed the market over the past one quarter, declining 17.16% as against the Sensex's 4.27% rise. The scrip had also underperformed the market over the past one year, sliding 31.3% as against the Sensex's 12.6% rise.
The large-cap company has equity capital of Rs 82.93 crore. Face value per share is Rs 5.
Dr Reddy's Laboratories said that on 25 August 2017, a law firm representing a purported investor in Dr Reddy's Laboratories, filed a purported class action lawsuit against the company, its CEO, and CFO, in the United States District Court for the District of New Jersey alleging violations of the US federal securities laws. The plaintiff in the lawsuit purports to represent a class of investors who purchased or otherwise acquired the company's publicly traded shares on the New York Stock Exchange between 17 June 2015 through 10 August 2017.
The lawsuit alleges that the company made materially false and/or misleading statements or omissions in connection with its corporate quality system, and specifically in connection with a warning letter from the US Food and Drug Administration dated 6 November 2015, and a letter from the Regierung von Oberbayem in Germany dated 10 August 2017. The lawsuit seeks damages to compensate the purported class of investors for a purported decline in the company's share price allegedly caused by the alleged misstatements or omissions.
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Dr Reddy's said it has not yet been served with the lawsuit. Dr Reddy's added that it cannot comment on the specific allegations in the pending litigation other than to state that the company believes the asserted claims to be without merit. The company will respond to the allegations after it has been served with the lawsuit and as and when it may be required to do so by the Court, Dr Reddy's said in a statement.
Dr Reddy's Laboratories' consolidated net profit declined 56.6% to Rs 66.60 crore on 2.5% rise in net sales to Rs 3315.90 crore in Q1 June 2017 over Q1 June 2016.
Dr Reddy's Laboratories is an integrated global pharmaceutical company.
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