Dr Reddy's Laboratories dropped 2.88% to Rs 3,278.30 at 12:00 IST on BSE after reports that Los Angeles-based law firm Lundin Law has filed a class action law suit, alleging that the company possibly violated federal securities laws.
Meanwhile, the BSE Sensex was up 262.49 points, or 1.05%, to 25,751.25.
Huge volumes were witnessed on the counter. On BSE, so far 2.78 lakh shares were traded in the counter, compared with an average volume of 40,837 shares in the past one quarter.
The stock was volatile. At the day's high of Rs 3,404.75, the stock rose 0.86%. At the day's low of Rs 3,140, the stock tumbled 6.97%, so far during the day. The stock hit a 52-week low of Rs 3,010 on 9 February 2015. The stock hit a record high of Rs 4,382.95 on 20 October 2015.
The stock had underperformed the market over the past one month till 18 November 2015, falling 20.84% compared with 6.36% fall in the Sensex. The scrip had also underperformed the market in past one quarter, falling 19.4% as against Sensex's 8.44% decline.
The large-cap company has an equity capital of Rs 85.29 crore. Face value per share is Rs 5.
The investigation reportedly is related to allegations that certain statements issued by Dr Reddy's Laboratories were false and misleading concerning its financial performance.
Meanwhile, Dr Reddy's during market hours clarified that the company has always adhered to all disclosure requirements both of the Securities and Exchange Commission (SECs) and Indian stock exchanges including accounting practices as per the Indian Financial Reporting Standards (IFRS) and the Indian Accounting Standards.
The company on 6 November 2015 had announced that it had received three warning letters from the US drug regulator USFDA for inadequate quality control measures at three of its plants, including to API manufacturing plants in Andhra Pradesh and one formulation plant in Telangana.
Dr Reddy's Laboratories' consolidated net profit rose 25.7% to Rs 721.89 crore on 11.2% growth in net sales to Rs 3988.96 crore in Q2 September 2015 over Q2 September 2014.
Dr Reddy's Laboratories is an integrated global pharmaceutical company. Through its three businesses - Pharmaceutical Services & Active Ingredients, Global Generics and Proprietary Products - Dr Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations.
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