Granules India's Gagillapur facility warrants regulatory action, the USFDA says

Granules India Ltd. has informed the exchanges on Tuesday, December 3, that the company's Gagillapur facility in Telangana, has been classified as Official Action Indicated (OAI) by the United States Food and Drug Administration (USFDA).

In September this year, the USFDA had issued a form 483 with six observations for the Gagillapur facility.

An Official Action Indicated or OAI status means that a facility has objectionable conditions or practices that require regulatory or administrative action.

During the September quarter earnings call, the management had indicated a resolution of the facility by December.

"The company has responded to all the observations issued by the USFDA. Additionally, the company has voluntarily undertaken a comprehensive evaluation of the facility for further enhancements that lead to improvement of the facility," Granules India said in its statement.

In September, CNBC-TV18 had accessed the form 483 issued to Granules' Gagillapur unit.

Some of the violations included equipment and utensils not cleaned at appropriate levels, Responsibilities and procedures applicable to quality control unit not in writing, fully followed among others.

The facility was inspected by the USFDA between August 26 to September 6 this year.

Experts say that an OAI classification will require more GMP and quality compliance and once that is done, a re-inspection is likely.

In case the compliance does not happen, it can escalate to a warning letter or even an import alert for the facility.

Shares of Granules India are down to the lowest point of the day, declining 8% to ₹543.75 post the announcement.