Ipca Labs down 6% as stock turns ex-date for 1:1 split

Shares of Ipca Laboratories slipped 6 per cent to Rs 1,029.60 on the BSE in Monday's intra-trade as the stock turned ex-date for 1:1 split. The stock was down 8 per cent from its day's high of Rs 1,124, after it opened at Rs 1,118.85 on the BSE. Each fully paid-up equity share of Rs 2 each of the company has been sub-divided into 2 fully paid-up equity shares of Re 1- each.

At 02:10 pm, the stock recovered partially from its intra-day low and was trading 3 per cent lower at Rs 1,067 on the BSE. In comparison, the S&P BSE Sensex was up 0.83 per cent at 60,243 points. A combined 1.35 million equity shares had changed hands on the counter on the NSE and BSE.

The pharmaceutical company has fixed Tuesday, January 11, 2022, as the 'record date' for the members entitlement of sub-divided shares.

In order to improve the liquidity of the company’s share and to make it more affordable for small investors so as to broad base the small investors base, the board of Ipca Labs at their meeting held on November 13, 2021 had approved sub-division of equity shares of the company.

Ipca Labs has underperformed the market in the recent past. In the last three months, its stock price has declined 10 per cent, as compared to a 0.27 per cent rise in the S&P BSE Sensex. In the past six months, it was 0.53 per cent higher, as against a 15 per cent gain in the benchmark index, and in the last one year, the stock was down nearly 2 per cent, as compared to a 23 per cent rally in the Sensex.

Ipca is among India’s top 20 pharmaceutical companies. Its domestic formulations market contributed 37 per cent of the total revenue in fiscal 2021, as against a 42 per cent in fiscal 2020.

During fiscals 2016 to 2020, Ipca had incurred costs towards remediation of regulatory issues raised by the US Food and Drug Administration (USFDA) at three of its plants, and had invited US FDA for re-inspection. Timely resolution of import alert issued by the US FDA can provide additional uptick to revenue growth and profitability and, hence, will be a key monitorable, rating agency CRISIL Ratings had said in October 2021. 

Around 70 per cent of the revenue is derived from sales of drugs in the pain management, cardiovascular, anti-diabetic and anti-malarial segments, which are intensely competitive. The domestic pharmaceutical sector has recently been subject to increased regulatory scrutiny, adding to the challenges of the players, it had said.

However, this is partially offset by the company’s leadership position in key brands such as Zerodol, Hydroxychloroquine Sulfate, and Solvin. Besides, the company is required to comply with regulations issued by authorities in various countries, given its international presence. The company is exposed to regulatory scrutiny by international authorities, including US FDA and adverse actions could impact the company’s growth prospects, as witnessed in the case of USFDA import alerts on its three plants, it added. CLICK HERE FOR DETAILS