InvestorQ : Why did stocks like Shilpa Medicare and Cipla fall so sharply on 26 February? Is it because of the supplies from China being stopped?
Lavanya Subramanian made post

Why did stocks like Shilpa Medicare and Cipla fall so sharply on 26 February? Is it because of the supplies from China being stopped?

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ishika Banerjee answered.
1 year ago
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Of course, both these companies do depend on the Chinese markets to supply the APIs (active pharma ingredients) for their pharma manufacture. That is surely one side of the story. But the bigger issue in both the cases appears to be more of US FDA related. Both the companies have been issued Form 483 objections to which they need to responds. A typical Form 483 objection is raised if the USFDA inspection finds some anomalies or shortcomings in the sanitation and other services in the testing laboratories and the manufacturing facilities. This is the big news pertaining to these two companies. Of course these are objections to which they get time to respond. However, it has been seen that whenever the Form 483 objections are issued, the stocks do tend to correct sharply. That was evident on 26 Feb when both the stocks; Cipla and Shilpa fell by more than 5% in a single day.

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