FIIs press sell button on Wockhardt, stock tanks 75% from record high

FIIs have sold 3.06 million shares worth of around Rs 200 crore of the company in July-September quarter.

Foreign Institutional Investors (FIIs) have pressed the sell button on Wockhardt offloading equity shares worth of around Rs 200 crore during the quarter ended September.

FIIs have sold nearly 3.06 million shares representing nearly 3% stake in the pharmaceutical firm during July-September quarter (Q2). The calculation is based on an average price of Rs 625 per share for the quarter.

As a result, FIIs holdings have declined by 2.79 percentage points to 7.59% in September quarter. Overseas investors held a record 10.38% stake in the company at the end of June quarter.

The reduction in holdings by FIIs comes after a gap of two years. They had increased their stake nearly ten-fold during the period from merely 1.14% at the end of September 2011 quarter.

The market value of Wockhardt stock had appreciated by 161% from Rs 383 on September 30, 2011 to Rs 1,000 on June 30, 2013 on BSE. The stock hit a historic high of Rs 2,166 on March 12 this year.

However, from March, the shares of Wockhardt have beaten down following slew of negative developments regarding the company’s manufacturing facilities. The stock has tanked 53% in past three months and plunged 78% from its record high on BSE.

Last week, Britain's drug authorities revoked their approval for Wockhardt’s Chikalthana plant, which generated annual revenues of GBP 12 million (about Rs 117 crore).

"The UK’s Medicines and Healthcare Products Regulatory Agency (UKMHRA) has decided to withdraw the previously issued GMP (good manufacturing practice) Certificate to the company’s manufacturing facility situated at L1, MIDC, Chikalthana, Aurangabad and will be issuing a restricted GMP Certificate to the site along with a statement of non-compliance for the said site,” Wockhardt said in a BSE filing on Friday.

Earlier in July this year, the US Food and Drug Administration (USFDA) imposed an import alert on Wockhardt's export-oriented plant at Waluj in Maharashtra and issued a precautionary recall for sixteen medicines made by the company at the unit.

In May, the USFDA had also issued an import alert on the same facility which makes injectables and solid dosages. Wockhardt had said the impact of the import alert on the revenues is estimated to be in the range of $100 million on an annualised basis.

The company had already initiated several corrective actions to resolve the issues at the Waluj plant, it added.

Meanwhile, the board of directors of the company is scheduled to announce its Q2 earnings on October 25, 2013.

The company had reported 12% year-on-year (y-o-y) decline in its consolidated net profit at 

Rs 323 crore for the first quarter ended June 2013. Net sales too grew marginally by 1.3% at Rs 1,358 crore on y-o-y basis.