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Nestle India slips in volatile trade after FSSAI order

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Nestle India declined 0.33% to Rs 5,991 at 15:28 IST on BSE after FSSAI ordered the company to recall nine Maggi noodle variants from India.

Meanwhile, the BSE Sensex was down 25.70 points, or 0.1%, to 26,787.72

On BSE, so far 1.01 lakh shares were traded in the counter, compared with an average volume of 5,646 shares in the past one quarter.

The stock was immensely volatile. The stock rose as much as 1.93% at the day's high of Rs 6,127 hit so far during the day. The stock fell as much as 4.86% at the day's low of Rs 5,718.20 hit so far during the day. The stock hit a record high of Rs 7,499.95 on 10 March 2015. The stock hit a 52-week low of Rs 4,755 on 5 June 2014.

The large-cap company has an equity capital of Rs 96.42 crore. Face value per share is Rs 10.

The Food Safety and Standards Authority of India (FSSAI) today, 5 June 2015 ordered Nestle India to withdraw and recall all the nine approved variants of its Maggi Instant Noodles from the market having been found unsafe and hazardous for human consumption and stop further production, processing, import, distribution and sale of the said product with immediate effect. The FSSAI also directed the company to withdraw and recall Maggi Oats Masala Noodles with Tastemaker for which risk/safety assessment has not been undertaken and product approval and was not been granted.

Nestle India before market hours today, 5 June 2015 said that Maggi Noodles are completely safe and have been trusted in India for over 30 years. The trust of consumers and the safety of products is the company's first priority, Nestle India said. Unfortunately, recent developments and unfounded concerns about the product have led to an environment of confusion for the consumer, to such an extent that Nestle India has decided to withdraw the product off the shelves, despite the product being safe, the company said. The company promises that the trusted Maggi Noodles will be back in the market as soon as the current situation is clarified, it added.

Earlier, Nestle India had after market hours on 1 June 2015, announced that it understands that consumers are concerned by reports that the authorities in Uttar Pradesh have found elevated levels of lead in a sample pack of Maggi noodles. The company said it is fully cooperating with the authorities who are conducting further tests and the company is awaiting the results.

In April 2015, Uttar Pradesh Food Safety and Drug Administration (UP FSDA) asked Nestle India to withdraw a batch of Maggi noodles which were manufactured in February 2014 after it found high levels of added monosodium glutamate (MSG), a taste enhancer, in the noodles and lead beyond permissible limits.

Nestle India's net profit rose 23.6% to Rs 320.28 crore on 8.1% growth in total income to Rs 2541.95 crore in Q4 March 2015 over Q4 March 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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First Published: Fri, June 05 2015. 15:31 IST