The stocks of the fast moving consumer goods (FMCG) major Nestle India were dented on Thursday, as the central government sought reports from all states over the quality of Maggi noodles.
On Thursday, the company's scrip at the Bombay Stock Exchange (BSE) declined by around three percent or 180.30 points at Rs.6,010.80 per equity share from its previous close of Rs.6,191.10.
On Wednesday, the stock declined by 9.05 percent or 616.35 points at Rs.6,191.10 per equity share from its previous close of Rs.6,807.45.
The downward trend in the stock was accelerated by the central government's move to get reports from all the state governments over the popular snack.
The development follows the central government's complaint against Nestle India on Wednesday with the National Consumer Disputes Redressal Commission (NCDRC), that its best-seller brand Maggi noodles may contain higher-than-permissible levels of some substances like Lead.
Uttarakhand and Gujarat state governments on Thursday banned the popular noodles brand. Delhi announce its ban on Wednesday for 15 days.
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On Thursday, Nestle India's scrip touched a low of Rs.5,800.10 in the intra-day trade.
"The Maggi issue has dented the stock heavily. The stock is generally an outperformer even when the markets are down," Vinod Nair, head for fundamental research, Geojit BNP Paribas Financial Services, told IANS.
"But for short-to-medium term there will be a downward trend. However, long-term investors do not need to be worried as the stock still remains very attractive," Nair said.
Meanwhile, Nestle maintains that its product is safe for consumption.
"We are confident that our Maggi noddle products in India and elsewhere are absolutely safe for consumption," the company said in a statement.
"We are fully cooperating with the authorities and engaging with them to clarify the situation," the statement said.
Several states have sent the product for testing for higher-than-permissible levels of substances like Lead. Some major departmental stores across the country have already taken off the product from their shelves.