Glaxo down 4.3% after Nomura downgrade

India's GlaxoSmithKline Pharmaceuticals is down 4.3 per cent after Nomura downgraded the stock by a notch to "reduce" from "neutral", citing the impact from the government's recent price controls and decreasing likelihood of an open offer from parent GlaxoSmithKline Plc.

The brokerage expects 35 per cent of GlaxoSmithKline Pharmaceuticals' portfolio, including best selling drugs such as antibiotic Augmentin, to be impacted from new regulations that seek to curtail prices for 348 drugs deemed essential.

Nomura also said expensive valuations would deter parent GlaxoSmithkline PLC from raising its stake in the Indian unit.

Analysts were expecting GlaxoSmithkline PLC to beef up its holding in its Indian pharma unit after it spent $940 million to raise its stake in its other Indian unit, GlaxoSmithKline Consumer Healthcare Ltd.

GlaxoSmithKline Pharmaceuticals shares have gained almost 80 percent since November, when the GSK offer for the consumer health unit was first announced.