Shasun Pharma in the red

Shasun Pharma had been hitting new highs over the past couple of days but since yesterday, it has been in the red. Today, the stock is currently down over 2% at Rs.124.85, and this is after hitting an intra day low at Rs.122.45.

The stock is down after news came in yesterday that a a fire had broken out at its Ibuprofen IP Grade packing section in API facility at Pondicherry around 2.30 am on April 27. The company stated in the Press Release that the accident occurred in an isolated packing section from the main production block and other grades packing section. It has further stated that there was no impact to the other manufacturing operations, product supplies and no major damage to the facility. There has not been human casualty or injuries and the facility is fully covered with insurance.

The market is perturbed by the fire but at the same time, has not exactly pummeled the share price down to pulp. It remains wary about the extent of damage.

Last week, the stock price had spurted up after the company announced preferential allotment to SeQuent Scientific. This company plans to subscribe to 3.5 million equity shares of Rs 2 each at a price of Rs 110/share and also 7.1 million warrants at the same price, with each warrant convertible at par into equity shares. On full conversion, SeQuent’s stake in Shasun will rise to 15.77% and that of promoters will go down from 41.97% to 35.2%.

SeQuent is the majority partner in the 73:27 JV with Shasun to develop, manufacture and sell veterinary products which will include APIs and formulations in the global market.