The arrest of Telugu Desam Party president and former Andhra Pradesh chief minister N. Chandrababu Naidu in the sensational Rs 371 crore state skill development corporation scandal and his subsequent imprisonment in Rajahmundry jail on judicial remand has dealt a significant blow to the party's leaders and cadre.
Furthermore, this development has come as a major shock to Naidu's family-owned Heritage Foods, a dairy firm run by his wife Nara Bhuvaneshwari and daughter-in-law Nara Brahmani.
By Monday evening, Heritage Foods witnessed a 7% decline in its shares, just two days after Naidu was placed in judicial custody for 14 days as a result of the multi-crore scam trial by the ACB court in Vijayawada.
According to market trends, Heritage Foods' shares on the BSE closed 7% lower at Rs 253, as investors expressed concerns about the company's future prospects following Naidu's 14-day judicial custody. The 52-week high for the scrip is Rs 287.35, and the 52-week low is Rs 135.15.
On Tuesday, however, the scrip was trading at Rs 256.65 on the National Stock Exchange and Rs 256.75 on the Bombay Stock Exchange by the afternoon.
Market analysts anticipate that if Naidu's remand situation persists, there may be further declines in its shares. This has led to speculation in the market that it may not be advisable to purchase Heritage shares at this stage.
"Perhaps one has to wait until the assembly elections in 2024. If the TDP returns to power, the stocks of Heritage Foods might rally again," one analyst suggested.
Brahmani Nara, who is married to Naidu's son Lokesh, serves as the Executive Director of Heritage Foods, while Naidu's wife Bhuvaneswari holds the positions of Vice-Chairperson and Managing Director at the dairy company.
In light of the purported threat to his life, the 73-year-old former chief minister has been provided with separate accommodation within the jail.
The court has granted amenities such as home-cooked food, medication, and a special room to Naidu during his judicial custody.