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Nestle India slumps in volatile trade

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Nestle India lost 7.75% to Rs 6,280 at 11:25 IST on BSE on reports of the alleged discovery of unsafe substances in its noodle brand Maggi.

Meanwhile, the BSE Sensex was down 165.83 points, or 0.61%, to 27,022.55

On BSE, so far 32,015 shares were traded in the counter, compared with an average volume of 3,604 shares in the past one quarter.

The stock saw high intraday volatility. The stock hit a high of Rs 6,533 and a low of Rs 6,119.40 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.

As per reports, the Delhi government has called Nestle India's popular snack Maggi unsafe for consumption. Karnataka and Haryana governments have decided to test the samples, reports added. But the Goa government has reportedly given a clean chit to Maggi.

The AAP government in Delhi said yesterday, 2 June 2015, samples of Maggi noodles it tested were found unsafe and officials of manufacturer Nestle India will be summoned, as the popular instant snack brand faced the heat from authorities across the country. Only one of the thirteen specimens tested by the Delhi government's food safety lab was deemed acceptable, with lead levels in ten of them exceeding the prescribed limit while five were inaccurately branded and contained taste-enhancer monosodium glutamate (MSG) without proper declaration. The Delhi government has decided to initiate a case against the company for selling an unsafe product and impose a financial penalty for misbranding, reports 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 8.4% growth in net sales to Rs 2506.79 crore in Q1 March 2015 over Q1 March 2014.

Nestle India is a subsidiary of Nestle S.A. of Switzerland. It manufactures milk products and other food products.

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First Published: Wed, June 03 2015. 11:24 IST