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Patanjali Foods Shares Drop 5% Following SC Summons to Ramdev

In Tuesday’s intraday trading, shares of Patanjali Foods dropped 5.2% to Rs 1,342 a share on the BSE after the Supreme Court issued a personal appearance summons for Baba Ramdev and Acharya Balkrishna for their failure to appear in court following a show cause notice in a contempt case.

The notifications, according to the Supreme Court bench, were given to Patanjali Ayurved and its managing director, Acharya Balkrishna, citing their breach of court orders and warning of probable contempt proceedings.

The court’s directive comes after its criticism of Patanjali Ayurved on February 27 for disseminating misleading advertisements. These advertisements claimed to treat medical conditions such as BP, diabetes, fevers, epilepsy, and lupus.

According to the bench, comprising justices Hima Kohli and Ahsanuddin Amanullah, Balkrishna and Ramdev were prima facie violating Sections 3 and 4 of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.

At 2:25 PM, shares of Patanjali Foods quoted 3.8 per cent to Rs 1,362 per share as against 0.97 per cent fall in the benchmark S&P BSE Sensex. 

In August 2022, the Supreme Court issued notice to Patanjali Ayurved Ltd after the Indian Medical Association (IMA) submitted a plea to the court alleging a smear campaign against vaccination drives and modern medicines by Baba Ramdev.

In November, the Supreme Court cautioned Patanjali Ayurved against disseminating “false” and “misleading” claims in its advertisements regarding the efficacy of its medicines in treating various ailments. The court had warned Patanjali that it could face fines of up to Rs 1 crore for misleading advertisements.

Separately, Patanjali Foods, last week, announced the formation of two wholly-owned subsidiaries of the company in India. 

The company also declared an interim dividend of Rs 6 per equity share for the financial year 2023-24. The payment of the same will be made on or before April 11, 2024. 

“The board of directors of the company has fixed Thursday, March 21, 2024 as the record date to ascertain the name of the eligible shareholders/ beneficial owners of the equity shares of the company to whom the aforesaid interim dividend shall be payable,” it said in an exchange filing.

Financially, the fast-moving consumer goods company reported a drop of 19.55 per cent in net profit to Rs 216.54 crore for the third quarter ended December 31, 2023. It had reported a net profit of Rs 269.18 crore in the year-ago period.

The company’s net sales, however, saw a rise of 0.2 per cent to Rs 7,910.70 crore from Rs 7,926.64 in the year-ago period.

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(Source: Business Standard)

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