Patanjali Foods' shares plunge 4% after SC contempt order

28 Feb 2024 , 12:15 PM

Wednesday saw a 4% decline in the shares of FMCG major Patanjali Foods, reaching the day’s low of ₹1,555.55 on the NSE. This came the day after the Supreme Court (SC) sent summons to Baba Ramdev and Acharya Balakrishnan, questioning why the court should not start contempt proceedings against them for disobeying its instructions. 

Until more orders are received, Patanjali Ayurved is prohibited from promoting and advertising the products intended to treat illnesses and diseases.

In contrast, Patanjali Foods Limited (PFL), an independent listed company that solely deals in edible oil and food FMCG items, stated in a regulatory filing the same day that the SC order had nothing to do with PFL.

It went on to say that Patanjali Foods’ routine business operations and financial performance are unaffected by the observations.

The Supreme Court’s ruling followed an ongoing legal battle between Patanjali and the Indian Medical Association (IMA), which the latter has accused of demeaning other mainstream medical practices.

Patanjali was ordered by the court to stop publishing advertising that make ‘casual statements claiming medicinal efficacy’ after it had promised judges last year in the ongoing dispute.

Additionally, the judges questioned Patanjali about why it wasn’t appropriate to file a contempt of court case against the business.

According to news agency Reuters, Ramdev had previously refuted the criticism and charged that certain doctors were disseminating false information against traditional medicines, which are extremely well-liked in India.

The Indian Medical Association (IMA) informed the court that Ramdev’s company has persisted in running advertisements in newspapers that claimed to provide a ‘permanent solution’ for ailments like diabetes, asthma, and high blood pressure. Ayurvedic medications and personal care items are sold by Patanjali.

The third consecutive loss is the result of today’s adjustment. Six out of the last seven trading sessions have seen cuts in the stock.

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