Wockhardt Ltd is one of India’s leading pharma companies with annual sales of $1 Billion. Its corporate headquarters is housed in a gleaming building right next to National Stock Exchange in Mumbai.
On April 1, 2013, Wockhardt was trading at around Rs.2025 per share.Around a month later,MSCI added to its index which is a good sign for any scrip.
On 24th May, 2013,Wockhardt released the following press release to the stock exchanges:
Wockhardt Limited has informed the Exchange that the Company has received an ‘import alert’ from USFDA on one of its manufacturing unit located in Waluj near Aurangabad. The impact of the import alert on the revenues is estimated to be in the range of $100m on an annualised basis. The Company is taking all steps to address the concerns raised by USFDA and shall put all efforts to resolve the issue at the earliest.
All hell broke lose following this announcement.The stock kept falling and is now quoting at around 400 Rs/share !
This is around 25% of its quoted value only 4 months back !
The moral of the story:Invest in the Indian Equity Markets only if you can stomach the volatility !