Patanjali shares dip over 4% amid regulatory challenges

Patanjali share price: Patanjali Ayurved Group shares witnessed a sharp decline today, plummeting by 4.47 per cent to reach an intraday low of Rs 1493.55 apiece on the National Stock Exchange (NSE). The drop comes in the wake of significant regulatory challenges faced by the company, including a show-cause notice from the GST intelligence department and the suspension of licenses for some of its pharmaceutical products.

The troubles for Patanjali began with a show cause notice issued by the GST intelligence department to Patanjali Foods, a subsidiary mainly engaged in the edible oil business. The notice, amounting to input tax credit worth Rs 27.46 crore, questioned why the credit should not be recovered along with interest and why penalties should not be imposed. This development was disclosed in a regulatory filing made by the company on April 26.

Adding to the regulatory woes, the drug regulator in Uttarakhand suspended manufacturing licenses for 14 products associated with the renowned yoga guru Ramdev. This suspension was in response to repeated instances of misleading advertisements regarding the efficacy of these products. Some of the suspended products include Swasari Gold, Mukta Vati Extra Power, Lipidom, and Eyegrit Gold, among others.

These regulatory challenges have sparked concerns among investors, leading to a significant drop in Patanjali's share price. The company, which operates in various segments including edible oils, food, FMCG, and pharmaceuticals, is now facing scrutiny over compliance and advertising practices.

In response to these developments, Patanjali Foods stated that it will take all necessary actions to defend its case before the authorities. However, the expected financial implications of these proceedings remain uncertain.

As investors await further developments, the future trajectory of Patanjali's share price will likely be influenced by the company's ability to address regulatory concerns and restore investor confidence amidst ongoing challenges.