Patanjali Foods down 11% in trade today; here's what's worrying investors

Patanjali Foods shares slipped 10.6 per cent in Friday's trade on BSE, logging an intraday low at Rs 1,620.7 per share. The selling pressure on the counter came after the goods and services tax (GST) authority slapped the company with a tax penalty of  Rs 33,90,542. 

 

Around 10:35 AM, Patanjali share price was down 9.56 per cent at Rs 1,639.7 per share on BSE. In comparison, the BSE Sensex was down 1.19 per cent at 73,727.81. The market capitalisation of the company stood at Rs 59,356.3 crore. The 52-week high of the stock was at Rs 2,030 per share and the 52-week low was at Rs 1,170.1 per share.

 

 

However, the company believes there will be no material impact on financial or operational activities, except to the extent of the penalty amount imposed. Further, the company would file an appeal before the Appellate Authority against this demand under applicable provisions of the CGST Act, 2017.

 

In February, the Supreme Court of India had dismissed the Rs 186 crore tax demand imposed on Patanjali Foods Ltd. The apex court quashed the demand following a Special Leave Petition (SLP) filed by the Principal Commissioner of Income Tax, Central 4, challenging a Bombay High Court ruling.

 

In a regulatory filing dated February 19, the company said, “The demand of Rs 186 crore for the pre–Corporate Insolvency Resolution Process (CIRP) period raised by the Income Tax Department have been quashed by the Hon’ble Supreme Court of India.”

 

The Supreme Court dismissed the SLP on January 15, 2025, thereby upholding the Bombay High Court’s decision. However, Patanjali Foods claimed it only became aware of the ruling on February 18, 2025, after discovering it on the tax and finance website Taxmann. 

 

Patanjali Foods focuses on producing a wide range of food products. The company is known for its emphasis on natural, Ayurvedic, and organic ingredients, and has grown significantly in India's food industry by offering alternatives to conventional processed food items.

 

In the past one year, Patanjali Foods shares have gained 15 per cent against Sensex's rise of 3 per cent.