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Shares of Ranbaxy Laboratories today nosedived by over 30%, making investors poorer by Rs 5,855 crore, after the US Food and Drug Administration issued an import alert on drugs produced by the company at its Mohali plant in Punjab.
Reacting to the news, shares of the drug major slumped 35% to Rs 297.25 in intra-day trade at the BSE. They finally ended at Rs 318.85, down 30.27% from previous close. At the NSE, the stock plunged 30.03% to settle at Rs 319.90.
A massive sell-off in the stock sent the company's market value down by Rs 5,855 crore to Rs 13,491 crore.
"Ranbaxy has seen volatility over the past few weeks. Today's fall may generate fresh buying interest from value buyers in the stock," said Milan Bavishi, Head Research, Inventure Growth and Securities.
Karvy Stock broking Analyst Rahul Sharma feels that the import alert for the Mohali plant is a major negative for the company. "The company has had around 18 filings since 2009 from this facility. We believe this would take a very long time, considering the past record of Consent Decree," he said.
In yet another setback to Ranbaxy Laboratories, the US Food and Drug Administration has issued an import alert on drugs produced by the company at its Mohali plant in Punjab, for violation of current good manufacturing practices.
According to information available on the USFDA website, the import alert, dated September 13, will cover all 'drugs and drug products' produced by Ranbaxy at the Mohali plant.
While the US health regulator did not specify details for issuing the alert, it said "detention without physical examination may be appropriate when an FDA inspection has revealed that a firm is not operating in conformity with current good manufacturing practices (GMP's)".
In a clarification to the BSE, Ranbaxy said: "In response to media reports pointing to USFDA website that Ranbaxy has received an import alert for its Mohali facility in India, we would like to inform you that the company has so far not received any communication from the USFDA on this subject. We are seeking information from the USFDA in this regard."
In May this year, Ranbaxy had pleaded guilty to "felony charges" relating to manufacture and distribution of certain 'adulterated' drugs made at two units in India and agreed to pay USD 500 million to US authorities as penalty.
