Krsnaa Diagnostics stock slumped more than 12 per cent on Thursday after National Health Mission, Rajasthan cancelled their contract for providing laboratory services in the state.

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It was trading at Rs 468, down 12 per cent in Thursday morning trade.

In an exchange filing, the company said this is in regard to the intimation given by the company dated May 12, 2023 with regards to acceptance of letter of award issued by National Health Mission, Rajasthan "the authority" for providing "Laboratory Services under Free

Diagnostics Initiative on HUB and SPOKE Model under NHM" in the entire state of Rajasthan to the company in consortium with the Telecommunications consultants India Ltd ('TCIL') (100 per cent government of India Undertaking) as lead bidder.

"As part of the tender requirements, there were requirements of provision of submitting additional performance security. There are disagreements over providing this additional performance security due to certain technicalities. Whilst we have made various representations to the authorities on the same as well as communicated our willingness and commitment to execute the agreement. However, to our disappointment, the authorities decided to cancel the letter of acceptance," the company said.

"In light of this situation, we wish to inform you that the Company, in collaboration with TCIL, has taken legal recourse. We assure you that our legal counsels are actively pursuing this matter with utmost dedication and diligence," it added.

"It is important to note that the cancellation of the letter of acceptance does not in any way impact our existing business operations. We remain steadfast in our commitment to expanding our business in both existing and recently executed agreements across various geographies," it added.