Divi's Lab hits 52-week low; stock tanks 17% intra-day

The stock was down 17% to Rs 918 on the BSE on back of heavy volumes.

Divis Laboratories hits 52-week low of Rs 918, down 17% on the BSE in intra-day trade on back of heavy volumes.

At 01:52 pm; the stock was down 16% at Rs 927 on the BSE as compared to 0.44% rise in the S&P BSE Sensex. The trading volumes on the counter jumped more than 10-fold with a combined 3.97 million shares changed hands on the BSE and NSE so far.

On December 7, 2016, the US Food and Drug Administration (USFDA) had issued form 483 with five observations against Divi's Laboratories' unit at Chippada Village in Visakhapatnam of Andhra Pradesh. The USFDA inspected the company’s unit from November 29, 2016 to December 6, 2016.

These critical observations will be responded within the time permitted, the company said in a statement.

Form 483 relates to certain critical observations issued to a company at the end of an inspection if there were any violations of the Food Drug and Cosmetic Act and other related acts of the US Government.

Divi's manufactures active pharmaceutical ingredients (APIs) and intermediates for generics among others at this plant.

Meanwhile, the exchange sought clarification from Divis Laboratories on December 23, 2016 with reference to news appeared on CNBC TV 18 dated December 23, 2016 quoting "Emkay says on Vizag 483 observation that proper control not being exercised over computer system, facility equipments not maintained to ensure purity quality strength and documentation and records not maintained or inaccurate falsified".

The reply is awaited.