Patanjali Foods slips into red after hitting all-time high in early trade

Last week, the Delhi High Court sought the Centre's stand on a petition seeking action against the alleged misbranding of Patanjali's "Divya Dant Manjan" as a vegetarian product.

The petitioner's counsel claimed that though the dental care product was being sold with a "green dot," symbolising that it was a vegetarian commodity, it contains fish extract, a non-vegetarian ingredient.

Justice Sanjeev Narula issued notice to the Centre, the Food Safety and Standards Authority of India (FSSAI), as well as Patanjali, Divya Pharmacy, Yoga Guru Ramdev, and other related parties on the petition by lawyer Yatin Sharma.

The law does not mandate declaration of a "drug" as vegetarian or non-vegetarian, but the packaging of "Divya Dant Manjan" wrongly carries a "green dot," which qualifies as "misbranding" under the Drugs and Cosmetics Act, the petitioner's counsel argued.

The matter would be heard next in November.

Earlier in April this year, the company said it will evaluate a proposal to acquire the non-food business of promoter group Patanjali Ayurved led by Baba Ramdev.

However, the company did not mention the categories of non-food products it plans to acquire, but sources said it will consider acquiring products falling into the dental care, home care, and personal care categories, which contribute 50-60% to the promoter's total turnover.

In a regulatory filing, Patanjali Foods informed that its board has discussed the initial proposal received from Patanjali Ayurved Ltd for a sale of the latter's non-food business undertaking to the company.

"The board accorded its in-principle approval for evaluating the most efficient mode of enhancing synergies with Patanjali Ayurved non-food portfolio in any manner on an arm's length basis," the filing said.

Patanjali Foods stock performance

Shares of Patanjali Foods have rallied around 54% in the past 12 months. Remember, in 2022, edible oil firm Ruchi Soya Industries announced that the name of the company has been changed to Patanjali Foods. In 2019, Baba Ramdev-led Patanjali Ayurved acquired Ruchi Soya for Rs 4,350 crore through an insolvency process.

The name of the company changed from Ruchi Soya Industries to Patanjali Foods with effect from June 24, 2022, as per a PTI report.