Natco Pharma, which had closed on Friday at Rs.468.35, plunged over 9% on opening at Rs.425 and continues to trade around the same levels.

The news from the company was not good. The company had informed us in Feb and early March that the US FDA had was conducting inspection at its two facilities in Chennai and Hyderabad. The update on that – post the inspection, the company has received some 483 observations for both the facilities.

The company says that these are “minor” in nature and it has already sent a response and compliance report for these observations. The company goes on to assure that there would be no adverse impact on its current and future pipeline products coming from these facilities.

Despite the assurances based on past experiences with other companies, the market is spooked. US FDA has become a bad word and till the company gets a clean chit, no assurances will help.