Ranbaxy falls on reports of potential $1 bn penalty, strike

Posted By: Religare
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Ranbaxy falls on reports of potential $1 bn penalty, strike
The stocks of Ranbaxy Laboratories had declined by more than 5 per cent after it was reported that the company has to pay potential settlement fee of about USD 1 billion to US authorities and an indefinite strike was declared at Zenotech Laboratories. Ranbaxy has a substantial stake in Zenotech Laboratories.

The Fortune reported that the federal prosecutors in U.S. have been negotiating a criminal and civil settlement with Ranbaxy, which might result in Ranbaxy having to pay the penalty. 

Goldman Sachs, which has given neutral rating to the company"s stock reported, "We believe the settlement amount of $1 billion (as quoted in the article) is disproportionate to the profitability of Ranbaxy's ANDA pipeline over the next 3 years and a $1 billion settlement amount could negatively impact its financials."

At 02:10 PM, on BSE, shares of the company were trading at Rs. 429.70, down by 5.30 per cent against the previous close of Rs. 453.75. The shares of the company reached the day's high of Rs. 443.50 and day's low of Rs. 414.00. However, the stock had touched the 52-weeks high of Rs. 624.90 on November 10, 2010 and 52 weeks low of Rs. 402.90 on May 25, 2011.

Read more about: ranbaxy, pharma, bse, nse
Story first published: Friday, May 6, 2011, 9:30 [IST]
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