Milky Mist Shares Drop 5% to ₹304.75 Despite Denial of FSSAI Paneer Notice

Shares of newly listed dairy company Milky Mist Dairy Food Ltd came under substantial selling pressure on Monday, October 12, 2026, dropping as much as 5% during morning trade to an intraday low of ₹304.75 on the National Stock Exchange (NSE).

The decline followed market unease surrounding circulating reports and social media claims regarding alleged regulatory scrutiny by the Food Safety and Standards Authority of India (FSSAI) and the Tamil Nadu Food Safety Department concerning the company's paneer products. The sell-off occurred despite a voluntary clarification issued by the company to the stock exchanges over the weekend.

Clarification Issued to Stock Exchanges

In a regulatory filing dated October 10, 2026, submitted to both the BSE and the NSE, Milky Mist sought to dispel unverified reports suggesting that central and state food authorities had ordered an inquiry or mandated sample testing of its paneer products.

The company stated: "In this regard, the Company wishes to clarify that, as at the date and time of this disclosure, it has not received any specific notice, order or communication from FSSAI or the Tamil Nadu Food Safety Department directing an inquiry into the Company's Paneer products, as alleged in the aforesaid media reports. The Company will appropriately respond to any communication received from the concerned authorities and take necessary action, if any, in accordance with applicable law".

Despite the prompt clarification, the stock opened lower on Monday morning from its previous close of ₹320.40, touching an intraday low of ₹304.75 before paring losses to trade around ₹308.15 by mid-morning. By contrast, the benchmark Nifty 50 traded with milder losses, declining 0.24% around the 22,466 level.

Regulatory Background and Product Scrutiny

The scrutiny on paneer follows earlier regulatory developments in late September 2026, when the FSSAI initiated action against quick-commerce and e-commerce platforms, including Swiggy Instamart and BigBasket, over non-compliant and misleading product claims.

Key areas under regulatory focus include:

• Specific Flagged SKUs: The regulator had flagged labeling and packaging representations for three products: Milky Mist Fresh Low Fat Cream, Farm Fresh Curd, and Greek Yoghurt.
• Packaging Revisions: Following that notice, Milky Mist confirmed it had submitted responses to the regulator and initiated packaging, artwork, and product display revisions across digital storefronts.
• High Reliance on Paneer: Unlike curd or cream, paneer represents the single largest revenue driver for Milky Mist, registering over 34% year-on-year growth in the first quarter of FY27. Industry analysts note that any quality or compliance questions surrounding the core paneer vertical tend to draw amplified reactions from institutional and retail investors.

Market Performance and Valuations

Milky Mist made its debut on the Indian bourses on August 18, 2026, after completing a ₹1,553-crore initial public offering (IPO) that was subscribed over 56 times. The stock had listed at ₹165 per share—an 18% premium over its issue price of ₹140—and rallied significantly over subsequent weeks to cross ₹340.

While the company posted strong financial results in Q1 FY27—with revenue rising 43.6% year-on-year to ₹973.45 crore and net profit expanding to ₹64.68 crore—the stock commands premium valuation multiples. Market analysts observed that because the company is a recent market entrant with high exposure to consumer-facing perishables, sentiment remains particularly sensitive to food regulatory enforcement and labeling governance.

Tags: Milky Mist Dairy Food FSSAI FMCG Sector NSE BSE Nifty 50