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

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).

Sensex breaks 2-day fall on GST Bill optimism, jumps 183 points.

 The benchmark BSE Sensex  bounced back almost 183 points to close at over two-week high of 25,958.63 as investors lapped up realty, auto and metal stocks amid hopes of a breakthrough on GST Bill in Parliament and mixed cues from global markets.

Pick-up in rollover of November derivative contracts to the December series helped.

The market barometer managed to snap the two-day falling streak in which it had lost almost 93 points as value-buying in several blue-chip stocks surfaced.

Sentiment got a big lift on hopes that the government might pull off a compromise on the crucial GST Bill in the Winter Session of Parliament, which began today, brokers said.

The BSE 30-share gauge ended 182.89 points, or 0.71 percent, higher at 25,958.63, a level last seen on November 9.

Among the 30-Sensex constituents, 22 shares ended higher.

The broad-based NSE Nifty also closed the day higher by 52.20 points, or 0.67 percent, at 7,883.80. During the day, it shuttled between 7,897.10 and 7,832.

Covering-up of outstanding short positions by traders in view of the November expiry supported the recovery.

Globally, premier stocks in Asia closed mixed with an upward bias while Europe was higher in late morning deals.

Back home, Tata Motors was back in demand and gained the most by rising 5.51 percent, followed by Sun Pharma (up 3.96 percent) after the company announced that it has shelved plans to invest in wind energy business in the US.

GAIL, ITC, M&M, RIL and Hero MotoCorp registered gains.

Hindalco and Tata Steel rose up to 1.76 percent as prices of base metal pack recovered at the London Metal Exchange. Vedanta held flat at Rs 90.30.

In contrast, Dr Reddy's was hardest hit, falling 8.21 percent on reports that US FDA might withhold approval of the company's fresh drugs and stop import if no corrective action is taken.

Among BSE sectoral indices, realty gained most followed by auto, metal, consumer durables and power.

The broader markets continued to shine on persistent buying by investors, with the small-cap index ending 0.45 percent higher while mid-cap rose 0.26 percent.

Foreign Portfolio Investors (FPIs) remained net sellers as they sold shares worth Rs 540.12 crore on Tuesday, as per provisional data. The markets were closed yesterday on account of Gurunanak Jayanthi.