The Indian stock market experienced notable fluctuations on February 28, 2025, as the shares of Swasth Foodtech India Ltd made their debut. Unfortunately for investors, the listing was characterized by disappointment, as the stock launched at its issue price of ₹94 apiece, with no gains noted shortly after trading began.
Within mere minutes, Swasth Foodtech's stock dropped to ₹89.3, hitting the lower circuit limit with a 5% decline. This IPO, which had opened for subscription on February 20 and closed on February 24, was oversubscribed by 7.8 times, receiving bids for over 1.17 crore shares compared to the 15.07 lakh shares available. Despite this initial enthusiasm, the flat trading debut left investors without immediate returns.
The ₹14.92-crore IPO involved fixed-price shares with the company planning to use the proceeds for various growth initiatives, including setting up packaging for its existing products and financing working capital. Swasth Foodtech, established in 2021, is notable for processing rice bran oil and is contemplating diversifying its product offerings to include additional healthy oils such as sunflower and mustard oil.
Meanwhile, Patanjali Foods Ltd also faced considerable challenges as its stock plummeted by 10.6% during today's trading session, hitting an intraday low at ₹1,620.7 per share. This decline followed the news of the goods and services tax (GST) authority imposing a tax penalty of ₹33,90,542 on the company. At 10:35 AM, the Patanjali share price had already dropped 9.56%, marking the company's market capitalization at approximately ₹59,356.3 crore.
The past year saw Patanjali Foods' shares gain about 15% compared to the general 3% rise of the BSE Sensex, but recent events have generated unease. The company has committed to appealing against the penalty, stating it does not foresee any material impact on its financial or operational activities aside from the penalty itself. This announcement follows the Supreme Court's recent dismissal of another tax demand involving ₹186 crore, showcasing the mixed financial environment the company faces.
The broader stock index also reflected negative sentiment, particularly among the banking sector, heavily weighing on investor confidence. The BSE Sensex dropped over 1,000 points early Friday, largely due to lackluster earnings reports from Indian banks and considerable trading shifts influenced by the MSCI rejig, as well as strong movements of foreign institutional investors (FIIs) toward China. By 10 AM, the benchmark BSE Sensex was down by 1,014.08 points, settling at 73,598.35, with the Nifty down 300.45 points to 22,244.60.
Market analysts attributed the steep decline to factors such as rising US bond yields and unstable market conditions exacerbated by tariff worries stemming from the United States. V K Vijayakumar, chief investment strategist at Geojit Financial Services echoed this sentiment, noting how uncertainty from international policies tends to shake investor confidence.
Specific stocks felt the brunt of the downturn, with IndusInd Bank leading the plunge, trading down by 5.19% at ₹992, followed closely by Tech Mahindra and Mahindra & Mahindra. Notably, only Reliance Industries managed to stay afloat, posting modest gains. Among the sectoral indices, the Nifty Midsmall IT & Telecom Index fell the most by 3.70%, reflecting the ripple effect across technology stocks.
Adding to the challenges, Premier Energies saw its shares tumble by up to 8% during the trading session, primarily due to the expiration of a lock-in period for various shareholders, introducing added volatility to its stock performance. This scenario highlights the broader market trend of cautious trading and heightened selling pressures, as investors reacted to increased available shares following the IPO's lock-in expiration.
For the investors who ventured with Swasth Foodtech or held onto Patanjali Foods, the recent fluctuations serve as potent reminders of the inherent risks associated with stock trading. The dual narratives of anticipated growth paired with fiscal penalties and varying market confidence delineate the complex investment environment currently pervading the Indian stock market. With the market teetering on the edge of uncertainty, the coming weeks may prove pivotal for both established firms and new market entrants as they navigate these turbulent waters.