Nestle India spurted 3.93% to Rs 6,428 at 13:00 IST on BSE on reports that the Bombay High Court today, 13 August 2015, quashed orders of food regulators banning Maggi noodles.
Meanwhile, the S&P BSE Sensex was up 173.06 points or 0.63% at 27,685.32.
On BSE, so far 73,000 shares were traded in the counter as against average daily volume of 17,335 shares in the past one quarter.
The stock was volatile. The stock surged as much as 5.82% at the day's high of Rs 6,545 so far during the day. The stock rose as much as 0.97% at the day's low of Rs 6,244.95 so far during the day. The stock had hit a record high of Rs 7,499.95 on 10 March 2015. The stock had 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 12 August 2015, advancing 3.63% compared with Sensex's 0.54% fall. The scrip had, however, underperformed the market in past one quarter, declining 7.78% as against Sensex's 2.36% rise.
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The large-cap company has equity capital of Rs 96.42 crore. Face value per share is Rs 10.
According to reports, the Bombay High Court said the regulator, Food Safety and Standards Authority of India (FSSAI), would have to justify its ban of Maggi Noodles. The court reportedly said that the government did not follow principle of natural justice while passing orders. The court also ordered fresh tests to be conducted on Maggi, reports suggested. Nestle can restart manufacturing Maggi if tests find lead within limits, reports added.
Meanwhile, Nestle India after market hours yesterday, 12 August 2015 said that it is disappointed with the unprecedented step of filing of a complaint before the National Consumer Disputes Redressal Commission (NCDRC) against Nestle India. Based on newspaper reports it appears that the complaint makes similar allegations which were made to ban the product on 5 June 2015, Nestle India said. These issues are awaiting judgement by the Bombay High Court, the company added.
Nestle India further said that it maintains the highest standards of food quality and safety in the manufacture of all its products. The company added that Maggi noodles made in India have been tested and found to be safe for consumption by the authorities of several countries across the world.
Nestle India said that it does not add Monosodium Glutamate (MSG) in the manufacture of Maggi noodles. MSG is one of several forms of glutamic acid found in natural foods such as groundnuts/peanuts, wheat flour, tomatoes and cheese, Nestle India said. As the company uses some of these ingredients in Maggi noodles, the product will contain natural glutamic acid, Nestle India added. The company strongly reiterated that the No Added MSG statement on the product was not an attempt to mislead consumers.
It may be recalled that the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution in a statement yesterday, 12 August 2015 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 statement said. 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, the statement said. Thus, the total claim is for a sum of Rs 639.95 crore, Ministry of Consumer Affairs, Food & Public Distribution said in a statement yesterday, 12 August 2015.
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.
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