Pharmaceutical stocks fall 14% after Bank of Baroda and Bank of Maharashtra default on loans
outline:
Shares of Mangalam Drugs fell after the company disclosed that it had defaulted on loans from Bank of Baroda and Bank of Maharashtra, citing a decline in funds to treat global diseases and restructuring of loans due to weak order flow.
During Thursday’s trading session, shares of the company involved in manufacturing active pharmaceutical ingredients and intermediates fell around 14 per cent, hitting a new 52-week low of Rs. 47.21 on BSE after loan defaults by Bank of Baroda and Bank of Maharashtra.
With a market capitalization of Rs. 7.7 billion, equity Mangalam Drugs & Organics Limited Finished in red for Rs. 48.31 on Thursday, down about 11.5% compared to the previous close of Rs. 54.61 on BSE. The stock has had a negative return of about 54% over the year and is down nearly 31% over the past month.
What’s new?
In the last two trading sessions, the stock price of MANGALARM Drugs & Organics Limited has fallen over 21 per cent, likely triggered by disclosures about the company defaulting on loans from Bank of Baroda and Bank of Maharashtra.
According to an exchange filing dated November 18, MANGALARM Drugs & Organics Limited reported defaulting on its loan obligations to two banks for a period exceeding 30 days. The company said it had defaulted on Rs. 4.15 billion loan from Bank of Maharashtra, which is scheduled to be repaid before October 17, and Rs. 3.5 billion loan from Bank of Baroda was to be repaid before October 20.
The company emphasized that its business relies heavily on funding provided to manufacturers through US Aid to treat tuberculosis, HIV, malaria and other diseases. The loss of funding from the U.S. government had a serious impact on operations. Currently, only the Global Fund continues to support such treatments, but its budget has been reduced. As funding has slowed, orders for these treatments have also fallen sharply.
Mangalam Drugs & Organics Limited has also asked its lenders to restructure its loans and said it plans to submit its proposed restructuring plan by mid-December 2025. The company said it would continue to update stakeholders on its discussions with the bank, adding that it was working to resolve any overdue amounts as quickly as possible.
finance and other
Mangalam Drugs reported a decline in operating revenue, which was down about 26% year-on-year at Rs. ₹7.7 billion in the first quarter of FY 2025 and ₹5.7 billion in the first quarter of FY 2026. During the same period, the company recorded a net loss of 500 billion won. Net profit is 1.4 billion won, compared to 1.4 billion won. 300 million won in the fourth quarter of last year.
Mangalam Drugs & Organics Limited is engaged in the business of manufacturing and selling Active Pharmaceutical Ingredients (APIs) for various therapeutic segments. These include antimalarial drugs, antiretroviral drugs, and antihypertensive drugs.
The company is actively producing Pyronoridine Tetraphate, a novel ingredient (API) for use in antimalarial drugs. In July 2022, the company received pre-certification from the World Health Organization (WHO) for micronized and non-micronized forms of pyronaridine phosphate.
Written by Shivani Singh
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