Mumbai, June 4 (IANS) A day after the central government filed a complaint against Nestle India with the National Consumer Disputes Redressal Commission (NCDRC), the stocks of the fast moving consumer goods (FMCG) major were dented in the mid-afternoon trade session on Thursday.
The government had complained to NCDRC that the company’s best-seller brand Maggi noodles, which may contain higher-than-permissible levels of some substances like Lead.
Food and Consumer Affairs Minister Ram Vilas Paswan on Wednesday said the NCDRC will probe the matter and take appropriate action.
He said the government, for the first time, was taking action under Section 12-1-D of the Consumer Protection Act under which both the central and state governments have powers to file complaints.
The Delhi government has banned Maggi noodles for 15 days.
On the Bombay Stock Exchange (BSE), the company’s stock declined by around 4 percent or 229.30 points at Rs.5,961.80 per equity share at 1.15 p.m. from its previous close of Rs.6,191.10.
The scrip had touched a low of Rs.5,800.10 in the intra-day trade so far.
“The Maggi issue has dented the stock heavily. The stock is generally an outperformer even when the markets are down,” said Vinod Nair, head for fundamental research, Geojit BNP Paribas Financial Services.
“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.”
Nestle maintains that its product was safe for consumption.
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 take off the product from its shelves.
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.