Dr Reddy's shares slump 8.5%; m-cap dips Rs 4,746 crore

Mumbai: Shares of Dr Reddy's Laboratories on Thursday plunged by 8.5 percent, wiping out Rs 4,746 crore from market valuation, on worries that the USFDA might stop imports of the firm.

The stock fell on reports that the US Food and Drug Administration (USFDA) might withhold approval of the company's fresh drugs and stop import after it found several violations at three of its plants.

The stock tanked 8.21 percent to settle at Rs 3,110.35 on BSE. During the day, it slumped 9.99 percent to Rs 3,049.75.

At NSE, shares of the company dipped by 8.47 percent to end at Rs 3,100.75.

Led by the decline in the stock, the company's market valuation fell by Rs 4,746 crore to Rs 53,059 crore.

The stock was the worst performer on both the Sensex and the Nifty.

The regulator said it had found several violations with regard to current good manufacturing practices (CGMP) at three of its plants.

"At Dr Reddy's Laboratories' facilities, we identified significant deviations from CGMP for manufacturing of active pharmaceutical ingredients (APIs)... We found significant violations of CGMP regulations for finished pharmaceuticals," US FDA noted.

Meanwhile, in a post-market statement, Dr Reddy's Laboratories said the US FDA has extended the time-frame for replying to the warning letter issued to the company by about two weeks to December 7.

The company also said that it is in the process of preparing responses to the letter.

"The company is in the process of preparing a response to FDA's warning letter. The FDA has granted an extension until December 7, 2015 for the submission of the company's response to its warning letter," Dr Reddy's said in a regulatory filing.

The USFDA had earlier set a deadline for the company to respond within 15 days from the date of receiving the letter.

The FDA, which issued a warning letter to Dr Reddy's Laboratories on November 5 on three of its plants, said it found several violations with regard to current good manufacturing practices (CGMP).