Ranbaxy recovers lost ground; shares end nearly 4% higher
Mumbai: Shares of Ranbaxy Laboratories recovered from early losses and settled nearly 4 percent higher on hopes that settlement of its long lawsuit in the US would be positive for drug maker the in the long term.
The stock opened weak on the BSE and fell further by 4 percent in early trade. Later in the day shares recovered from lows to touch a high of Rs 458 before settling at Rs 455.50, up 3.63 percent on the BSE.
At the National Stock Exchange, the scrip closed at Rs 455.30, up 3.55 percent.
"With this settlement, the long lawsuit is now over for the company and since the amount in terms of penalty is same as earlier provided by the company, it's positive for the company both from short and long term perspective. Thus, with this development, one of the overhangs on the stock is out," said Sarabjit Kour Nangra, VP-Research- Pharma, Angel Broking.
Pleading guilty to "felony charges" relating to manufacture and distribution of certain adulterated drugs made at two India units, the US subsidiary of Ranbaxy yesterday agreed to pay USD 500 million -- the largest settlement by a generic medicine maker till date.
Ranbaxy also agreed to pay a criminal fine and forfeiture totalling USD 150 million and to settle civil claims under the False Claims Act and related State laws for USD 350 million.
The BSE benchmark Sensex ended at 19,722.29, up 30.62 points.