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Shares of Dr. Reddy’s Laboratories Ltd on Friday ended nearly 3% lower after the company said a German regulatory authority has issued major observations against its formulations unit at Visakhapatnam in Andhra Pradesh after an inspection.
The stock dipped 2.93% to end at Rs2,158.80 on BSE. During the day, it tanked 6.96% to Rs2,069.10. At NSE, shares of the company dropped 2.80% to close at Rs2,162.50. The company’s market valuation declined by Rs1,081.82 crore to a Rs35,791.18 crore. In terms of equity volume, 1.57 lakh shares of the company were traded on BSE and over 17 lakh shares changed hands on NSE during the day.
The company, however, did not elaborate on the observations which were made by the regulator related to violations of good manufacturing practices (GMP). “The regulatory authority of Germany (Regierung von Oberbayern) concluded an audit of our formulations facility in Duvvada, Visakhapatnam with zero critical and six major observations,” Dr. Reddy’s Laboratories said in a BSE filing.
The products manufactured at the facility are currently not exported to the European Union, it added. “The company will be submitting a corrective and preventive action plan (CAPA) to the authorities. The auditor has cautioned that the facility will receive EU-GMP certification from the regulator up to November 2018 only when the regulator approves the CAPA,” Dr. Reddy’s said.