The Supreme Court has asked Baba Ramdev and Acharya Balkrishna to come to court because they’re still airing ads that make false claims about curing diseases. Even after Patanjali promised to stop these ads last November, they kept airing them.
Because of this news, Patanjali Foods’ shares dropped 5.2% to Rs 1,342 per share on Tuesday. The court issued notices to Patanjali Ayurved and its managing director, Acharya Balkrishna, for disobeying court orders and warned of possible contempt proceedings.
Supreme Court Takes Action Against Patanjali for Misleading Ads
The Indian Medical Association (IMA) raised concerns by filing a writ petition, citing a persistent spread of misinformation by Patanjali regarding allopathy and modern medicine. They accused Patanjali of disparaging allopathy and making false claims about curing diseases. On March 19, at 11:20 AM, Patanjali Foods’ shares on the BSE were trading 3.5% lower at Rs 1,366.
In February, the Supreme Court issued a contempt notice to Patanjali Ayurved and its Managing Director Acharya Balkrishna for violating the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.
The Supreme Court is cracking down on Patanjali Ayurved for spreading false advertisements. They criticized Patanjali on February 27 for ads claiming to cure diseases like BP, diabetes, and epilepsy. Justices Hima Kohli and Ahsanuddin Amanullah say Balkrishna and Ramdev are likely breaking the law by promoting these products. Shares of Patanjali Foods dropped 3.8% to Rs 1,362 per share at 2:25 PM. This happened despite a 0.97% dip in the benchmark S&P BSE Sensex. Earlier, in August 2022, the Supreme Court noticed Patanjali after the Indian Medical Association complained about Ramdev’s smear campaign against vaccines and modern medicines. In November, the Court warned Patanjali against false advertising, threatening fines of up to Rs 1 crore.
Patanjali Foods Announces Formation of Subsidiaries and Interim Dividend
Last week, Patanjali Foods revealed the creation of two new wholly-owned subsidiaries in India. Additionally, the company announced an interim dividend of Rs 6 per equity share for the financial year 2023-24. The dividend payment is scheduled on or before April 11, 2024. The company stated in an exchange filing that the record date to determine eligible shareholders for the dividend is Thursday, March 21, 2024.
Financially, Patanjali’s net profit decreased 19.55% to Rs 216.54 crore for the third quarter ending December 31, 2023, compared to Rs 269.18 crore in the same period last year. However, its net sales increased slightly by 0.2% to Rs 7,910.70 crore from Rs 7,926.64 crore in the corresponding period last year.
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