Patanjali Foods Shares Decline 17% , Company Issue Statement over Decline

Patanjali Foods Ltd. has said there is no hidden materiality behind the steep fall in share price after the company's share was down for the third day. The company has also said the stock exchanges asked for clarification after the company's shares were seen to be moving in a very unusual manner.

On Wednesday, shares of Patanjali Foods dropped as much as 17.1% to a low of ₹337.85. The stock fell sharply and there was very high trading volume of trade volume and around 6 times the average for the last few days during the previous day of trading. Market data showed new short positions in the futures market were being created as the share price dropped and the open interest in the shares also got high.

After the sharp fall in market share, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) asked for clarification from the company on what went unpublished that could have affected the stock market. Patanjali Foods said in its filing that there are no material events, information or circumstances that will have to be disclosed under SEC & E.N. (Listing Obligations and Disclosure Requirements) Regulations 2015. It added that it is in the ordinary course and is still pursuing its long-term.

“The Company will be on its growth path and will be doing its business in the ordinary course while pursuing the business goal.” According to the company, Patanjali Foods has already disclosed all information that could affect the trading behaviour of its equity shares. “To the best of our knowledge and belief the Company has disclosed all the relevant events and information which need to be disclosed to the Stock Exchanges,” the company said.

It added that the exchanges have expressed their concerns regarding the high level of volatility in the stock. Exchange questions are common for listed companies when share prices in the company are seen to move dramatically and unexpectedly and they can be very opaque for the stock market.

Though it has assured investors that there are no unknown corporate developments, market players believe the recent selling pressure is likely due to a general sentiment in the market, profit booking and speculative activity as reflected in an increase in futures open interest.

Analysts will now keep an eye on the share in the coming sessions to see if the stock prices stabilize or if there is more volatility. The company has ruled out any undisclosed material events - but they say to be cautious and monitor future corporate news, quarterly results and macroeconomic trends in the market for investment.