The Hindu Business Line : Ranbaxy shares slump 23% in 2 days

Mumbai, July 15 Ranbaxy Laboratories shares slumped for the second consecutive day, down 14 per cent on Tuesday, amidst concerns of action from the United States Department of Justice (DoJ). Ranbaxy had come in for the stick from the DoJ regarding two of its manufacturing units in India, audit-related details on them and generic products sold by them.

The company’s stock closed at Rs 409 on the BSE and NSE. The development comes close on the heels of Ranbaxy promoters agreeing to sell their entire stake to Japan’s Daiichi Sankyo.

Meanwhile, shareholders of Ranbaxy Laboratories today approved allotment of over seven crore securities on preferential basis to Daiichi Sankyo. The shareholders of the company at the extra ordinary general meeting (EGM) held today approved the allotment of 4.6 crores equity shares and 2.3 crore warrants to Daiichi Sankyo at a price of Rs 737 each on preferential basis, the company informed the exchanges.

Heavy weight

In fact, the stock took a beating for two consecutive days after the developments broke out of the US, on concerns that the Daiichi-Ranbaxy agreement could come under a cloud.

It had fallen by 10.45 per cent on the BSE on Monday as well. Both companies have, however, gone on record to state that the agreement is binding. Ranbaxy’s stock has lost the gains that it had gathered since the Daiichi Sankyo deal was struck. In fact, Daiichi’s open offer for Ranbaxy’s shares, at Rs 737 per share, was to commence early next month.

The stock has plummeted by Rs 122 or 23 per cent on the BSE in the last two trading sessions as against a closing price of Rs 531.45 recorded on Friday, July 11. Being a heavy weight, Ranbaxy also contributed to a sharp dip in the BSE Healthcare index by 4.18 per cent on Tuesday.

The combined BSE-NSE turnover on the Ranbaxy counter doubled to Rs 1,359.28 crore to what it was on Monday (Rs 661 crore). On Friday, the combined turnover was just around Rs 65 crore.

Ranbaxy response

Meanwhile, Ranbaxy has filed its response in the US District Court for The District of Maryland, defending itself and agreeing to share the data that was demanded of it.

Pharma industry representatives are, however, concerned on the ramifications of Ranbaxy coming under the scanner of the US regulatory authority. All generic exports from the country’s drug-makers would now be viewed with some suspicion, said a worried industry official. All pharma stocks closed in the red, including Zydus Cadila and Cipla, among others.

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