Patanjali Saga: What Happened and How Has the Stock Fared?

The stock which had given a 34% return in the year 2023 is down by 16% in this year 2024, the major hit coming after the Supreme Court notice on 28th  of February to Patanjali Ayurved and its MD Acharya Balkrishna.

What has Happened?

The court had directed Patanjali to stop all electronic and print ads giving misleading information, with immediate effect.

The Supreme Court on 27th February, served a contempt notice to Ramdev-owned Patanjali Ayurved and its managing director Acharya Balakrishna for going back on their promise to not make “misleading claims” in advertisements for its medicines. 

The court found Patanjali in violation of the previous court order, which prohibited Patanjali from issuing misleading advertisements and making misleading claims.

SC on Wednesday castigated the Uttarakhand government’s drug licensing authority, demanding to know why and how it failed to act against misleading ads floated by Baba Ramdev’s Patanjali Ayurved, specifically for Coronil – a preparation made as a “cure” for COVID-19.

The case originated last year when the Indian Medical Association alleged that Baba Ramdev was conducting a smear campaign against the COVID-19 vaccination drive and modern medicine.

Impact on Patanjali Foods Stock

The stock Patanjali food which was one of the best performing FMCG stocks in the year 2023 by giving around 34% returns in that year is trading down by around 22% from its 52-week high of Rs.1713.80 which was made on the 9th of January 2024.

The majority of this fall has been seen after the notice served by the Supreme Court to Patanjali on the 27th of February.

Currently, as of 15th April, the stock is trading at Rs.1322.20 a piece on NSE.

Statement of Patanjali Foods

Patanjali Foods, in a regulatory filing on the same day, said,” The observations of the Supreme Court of India do not relate to Patanjali Foods Limited, which is an independent listed entity and operates in the space of edible oil and food FMCG products only.”

Conclusions: Though the company had issued a statement saying that they are an independent entity and they operate in the space of edible oil and food products only but still market sentiments for the stock turned out to be negative and the stock has seen a rough decline of more than 20% after the news.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.