Share prices of Ranbaxy tumbled nearly 7 per cent in the morning trade after

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a consent decree was filed in a United States court that requires the drug firm to make fundamental changes at its plants in the US and India.

The US Justice Department filed a "ground-breaking" consent decree in court yesterday, mandating Indian drug-maker Ranbaxy to adhere to US manufacturing standards and ensure integrity of data at its plants in the US and India.

Reacting to the development, the stock of the company opened on a weak note on the BSE and then plunged nearly 7 per cent to touch a early low of Rs 442.20.

Similar movement was seen on the National Stock Exchange where, the scrip tanked 6.79 per cent to a low of Rs 442.25.

The stock however, recovered some ground and was trading at Rs 450.90, down 5.11 per cent on the BSE, and at Rs 450.30, lower by 5.10 per cent on the NSE at 1042 hours.

"The stock reacted to the consent decree that was filed in the United States. The judgement is negative and the slump in the counter is a knee jerk reaction to the development," CNI Research Head Kishor Ostwal said.

The consent decree requires Ranbaxy to hire an outside expert to conduct a thorough internal review at the affected facilities, withdraw any applications found to contain false data, set up a separate office of data reliability within Ranbaxy and hire an outside auditor to audit the affected facilities in the future, the Justice Department said.

These are part of a wide range of actions to correct its violations and ensure that they do not happen again, it added.

"Today's announcement is the next step in the process of finalising our agreement with the FDA to resolve this legacy issue," Ranbaxy CEO and Managing Director Arun Sawhney said in a statement yesterday.