Stock market scam impacts Indian pharmaceutical firm's share prices

A recent 20 billion rupees ($427 million) Indian "stack-and-bank" scamhas led to a huge crash in share prices, especially those of major pharmaceutical companies, according to the Marketletter's local correspondent. The market capitalization of these companies also plunged due to the price crash over a 45-day period, a survey in the Indian Financial Express reported. Moreover, trading volume was heavily curtailed.

Citing instances of how prices reacted during the 45-day period ended April 15, the newspaper says that the share value of Ranbaxy, for example, slumped 40% or 288 rupees, Dr Reddy's plummeted 31% or 419 rupees and Cipla fell 15% or 155 rupees. Among foreign drugmakers quoted in India, it notes that Novartis plunged 39% or 164 rupees, Glaxo dropped 22% or 106 rupees and Pfizer fell 15% or 91 rupees.

In terms of market capitalization, Ranbaxy lost around 24%, Dr Reddy's 18% and Cipla was some 9% poorer, according to the newspaper.