Nestle India fell 1.52% to Rs 6,208.95 at 15:24 IST on BSE after the government filed a class action suit against the company seeking about Rs 640 crore in damages for alleged unfair trade practices.
Meanwhile, the BSE Sensex was down 370.59 points, or 1.33%, to 27,495.50.
On BSE, so far 20,000 shares were traded in the counter, compared with an average volume of 17,049 shares in the past one quarter.
The stock hit a high of Rs 6,339.75 and a low of Rs 6,008.20 so far during the day. The stock hit a record high of Rs 7,499.95 on 10 March 2015. The stock hit a 52-week low of Rs 5,300 on 12 August 2014.
The stock had outperformed the market over the past one month till 11 August 2015, rising 5.64% compared with 0.74% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, falling 7.49% as against Sensex's 1.30% rise.
The large-cap company has an equity capital of Rs 96.42 crore. Face value per share is Rs 10.
The Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution said it filed a complaint against Nestle India under section 12(1)(d) of the Consumer Protection Act, 1986 in the National Consumer Disputes Redressal Commission (NCDRC). The Department filed this class action suit on behalf of the large number of consumers of Maggi in the country against Nestle India on grounds of unfair trade practices, sale of defective goods and sale of Maggi Oats Noodles to the public without product approval.
The complainant has sought a sum of Rs 284.55 crore that Nestle India is liable to pay and a sum of Rs 355.40 crore as punitive damages on account of the gross negligence, apathy and callousness on the part of the Opponent Company. Thus, the total claim is for a sum of Rs 639.95 crore, Ministry of Consumer Affairs, Food & Public Distribution said in a statement.
Nestle India clarified during trading hours today, 12 August 2015, that it is yet to receive official notice about the complaint filed before the NCDRC. Its current knowledge on the issue is only based on media reports. The company said it will be able to provide substantive response after receiving the official papers.
Earlier, Nestle India had to withdraw its instant noodles brand Maggi from the market over allegations of high lead content and presence of MSG (monosodium glutamate).
Nestle India reported net loss of Rs 64.40 crore in Q2 June 2015 compared with net profit of Rs 287.86 crore in Q2 June 2014. Net sales dropped 20.1% to Rs 1933.84 crore in Q2 June 2015 over Q2 June 2014.
Nestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle is the world's leading nutrition, health and wellness company.
Powered by Capital Market - Live News
