Shares of Patanjali Foods tumbled 3.91 percent during Wednesday's trading session, hitting a low of Rs 1,556.80. The decline ensued after the Supreme Court's directive barred Patanjali Ayurved from disseminating advertisements promoting its traditional Ayurvedic medicines purporting to cure certain illnesses. Patanjali Foods, a subsidiary of Patanjali Ayurved co-founded by yoga guru Ramdev, witnessed this downturn.
The apex court's ruling emerged amid an ongoing legal feud with the Indian Medical Association (IMA), which accused Patanjali of demeaning conventional medical practices. Patanjali had assured the court last year that it would refrain from releasing ads making casual claims about medicinal effectiveness. However, the court found Patanjali in breach of this commitment.
In response, Patanjali Foods clarified in a BSE filing that the Supreme Court's order does not pertain to its operations. Emphasizing its status as an independent listed entity operating solely in the edible oil and food FMCG sector, the company asserted that the court's observations would not impact its day-to-day business or financial performance.
Despite this assurance, Patanjali Foods' stock plummeted to Rs 1,556.80, marking a 10.58 percent decline from its one-year peak of Rs 1,741 attained earlier this month on February 16.
Why SC barred Patanjali Foods Advertisements ?
The Supreme Court's ban on Patanjali advertisements stems from allegations by the Indian Medical Association regarding disparagement of conventional medicine. The court rebuked Patanjali for reneging on its promise not to make unsubstantiated medicinal claims in ads. Furthermore, the court contemplated initiating contempt of court proceedings against Patanjali, prompting the company to justify its actions.
Ramdev, in defense, refuted accusations of undermining traditional medicine and accused certain doctors of propagandizing against it, despite its widespread popularity in India. The Indian Medical Association presented evidence to the court indicating that Patanjali continued publishing newspaper ads claiming to offer permanent solutions for ailments like blood pressure, asthma, and diabetes, alongside its array of personal care and Ayurvedic products.
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