Nestle stock hit by Maggi row, sinks 9%

Shares of Nestle India tumbled 9 percent Wednesday, wiping-out Rs 5,942 crore from its market valuation, amid growing concerns about safety standards of its popular Maggi noodles brand.

After falling 11.86 percent to Rs 6,000 in intra-day trade, shares of Nestle finally settled at Rs 6,191.10, down 9.05 percent from its previous close on the BSE.

On the NSE, it tanked 9 percent to end at Rs 6,186.95.

The company's market valuation declined by Rs 5,942 crore to Rs 59,691.93 crore.

"Nestle India continued to remain under pressure and corrected by 11 percent in the day amidst the ongoing probe with respect to composition of its product Maggi," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.

The company said it has not received any order from the central or any state FDA authority for recall of Maggi noodles. The controversy over safety issues has deepened.

"We have not received any official communication from the authorities so far," the company said in a BSE filing.

Meanwhile, Kishore Biyani-led Future Group today stopped selling Maggi in its retail stores.

Nestle India, which has been at the receiving end with several state governments ordering tests to find out lead and monosodium glutamate (MSG) content in Maggi noodles, said it is "cooperating with the authorities".

Yesterday, the Delhi government decided to initiate a case against Nestle India after it found samples of Maggi noodles "unsafe" for consumption. The probe into alleged lapses has already widened to different parts of the country.

Delhi Health Minister Satyendar Jain met a number of officials of Nestle India and discussed finding of lead beyond the permissible level in Maggi masala (tastemaker).

In the broader market, the BSE benchmark Sensex ended at 26,837.20, down 351.18 points or 1.29 percent. 

Sensex sinks 351 points as drought fears loom

The benchmark BSE Sensex cracked the 27,000-mark on Wednesday by falling 351 points as investors trimmed positions in realty and FMCG stocks as hopes of another rate cut this year took a hit on fears of a drought in the country.

Market took further jolt after services sector activity contracted for the first time in 13 months in May, largely due to decline in new order flows amid competitive pressure.

In last two sessions, the Sensex has lost 1,011.79 points.

The Met department has projected monsoon this year to be "deficient", which has triggered fears of a drought.

The RBI yesterday lowered borrowing costs by 0.25 percent but linked further reductions to the monsoon.

Reacting to developments, NSE Nifty ended with a loss of 25.25 points at 8,102.10 -- its weakest close since December 17.

The Sensex after remaining in positive zone briefly at the outset, slipped into the negative zone and dipped below the 27,000-mark to hit a low of 26,698.26.

It settled 351.18 points or 1.29 percent lower at 26,837.20.

The 50-scrip Nifty after breaching the key 8,100-mark intra-day to touch a low of 8,094.15 ended at 8,135.10, down 101.35 points or 1.23 percent.

The biggest selloff was seen in realty stocks, with the BSE realty sector index sinking 5.54 percent.

Unitech crashed 35.17 percent and HDIL tanked 6.03 percent, while DLF stocks fell 2.48 percent.

Shares of Nestle India saw another session of selling pressure and slumped 9.21 percent amid growing concerns about safety standards of its popular Maggi noodles.

Interest-sensitive stocks, SBI, ICICI Bank, Yes Bank and Canara Bank bore the brunt for the second straight session.

Globally, Asian markets ended on a mixed note, while European markets were lower in their early trade as investors awaited the outcome of Greek debt talks and the European Central Bank's monthly interest-rate announcement.

Tata Power shares was the biggest loser by falling 6.13 percent on the Sensex. Shares of ITC, Vedanta, GAIL, ONGC, BHEL, Hindalco, HUL, Tata Motors, Dr Reddy's, Sun Pharma and M&M also weighed heavily.

Investor complaints against Mutual funds drop by 30% in FY15

Mutual fund houses received about 21,000 complaints from investors in 2014-15, a drop of 30 percent from the preceding fiscal year on account of efficient grievance redressal mechanism.

These complaints pertain to data corrections in investor details and non-updation of changes about address, PAN (Permanent Account Number), details and nomination among others.

According to industry experts, the complaint redressal mechanism has become efficient at most asset management firms with the grievances getting resolved within the prescribed turnaround time.

As per data on the Association of Mutual Funds of India (AMFI) website, the top 10 mutual fund houses received 20,963 investor grievances in past financial year compared with 30,065 complaints in 2013-14.

The folio base or investor accounts grew to 3.69 crore from 3.43 crore during the same period.

Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.

Among the top 10 fund houses, DSP BlackRock saw the biggest drop in investor grievances, with complaints plunging by 86 percent to 105 in the past year.

It was followed by Birla Sunlife MF, which which saw complaints tumbling to 1,117, a decrease of 82 percent during the same period.

IDFC MF saw the number of complaints declining by 58 percent to 295, while the same for Kotak MF fell by 38 percent to 253.

Sebi first took note of rising investor complaints in mutual funds in 2011 and hauled up fund houses for not taking serious note of these grievances.

In absolute terms, the highest number of investor complaints were recorded against HDFC MF (6,144) in 2014-15 followed by UTI MF (3,791), ICICI Prudential MF (3,251), Reliance MF (2,299) and Birla Sunlife MF (1,117).

Industry experts believe that large number of complaints are received due to the illegible data provided by investors as well as errors made by investors while filling up application forms.

Adani Ent tanks 82%; power, port, transmission biz demerged

Shares of  Adani Enterprises  (AEL) crashed 81.74 percent intraday Wednesday as the stock price has adjusted for demerger of its port, power and transmission businesses. The stock has touched a 52-week low of Rs 116.25 against previous day's closing of Rs 638.05. According to its filing on May 25, AEL demerged its complete port business (Belekeri Port and the investment in AEL in Adani Ports  ) into Adani Ports, power undertaking (the 40 MW solar power project in Kutch district and the investment in Adani Power  ) into Adani Power and transmission business (Mundra-Zerda transmission line and investment in Adani Transmission) into Adani Transmission. Aftr this demerger, equity shareholders of Adani Enterprises will get 14,123 shares in Adani Ports (for every 10,000 shares held in AEL), 18,596 shares in Adani Power (for every 10,000 shares held in AEL) and 1 share in Adani Transmission (for every 1 share held in AEL). The record for the same has been fixed as June 4. Also, AEL will merge Adani Mining Private Limited (AMPL) with itself, wherein no equity shares are to be issued as AMPL is a wholly owned subsidiary of AEL.   At 10:40 hours IST, the scrip Adani Enterprises was quoting at Rs 122.75, down Rs 515.30, or 80.76 percent on the BSE.