Supermarket giant Woolworths is facing a class action over alleged breaches of the Corporations Act following a shock profit downgrade in 2015. 

The proposed class action, to be led by law firm Maurice Blackburn, could exceed $100 million, the law firm said on Tuesday.

Aggrieved shareholders would claim Woolworths breached its continuous disclosure obligations ahead of the profit downgrade in 2015, which triggered a 13.7 per cent dive in its share price.

While Maurice Blackburn's investigation into the case is ongoing, the law firm alleged Woolworths knew that it was significantly behind its profit projections as early as October 2014 but continued to maintain its profit guidance until the publication of its half-year accounts in February 2015. 

"When corporations don't abide by the laws requiring they make timely and accurate market disclosures, these aren't mere technical breaches – it causes loss to shareholders, undermines the integrity of the market and distorts the efficient allocation of capital that could go to more deserving companies," Maurice Blackburn principal Andrew Watson said. 

"The end result is that shareholders, both individual everyday Australians and large institutional investors entrusted with members' savings such as large superannuation funds, unwittingly suffer the consequences and lose out in a major way."

IMF Bentham has proposed to fund the action, which would deal with claims of alleged misleading or deceptive conduct and alleged breaches of continuous disclosure laws between November 27, 2014 and February 26, 2015. 

Senior investment manager at IMF Bentham, Wayne Attrill, said that like all shareholder class actions, it would proceed only if enough shareholders supported taking action.

"This is a chance for investors who believe they were deprived of information on the true state of affairs of the company standing up and being able to access a meaningful redress," Mr Attrill said.

Woolworths on Tuesday said it had not been served with proceedings and would defend any action.

"Woolworths considers that it has, at all times, complied with its continuous disclosure obligations," the company said in a statement.

Woolworths told shareholders in August 2014 that it expected its full-year profit to increase by between 4 and 7 per cent. The profit guidance was reaffirmed at the Woolworths annual general meeting in November by then chairman Ralph Waters.

But in February the company downgraded its guidance to the surprise of investors.  

The class action follows failed action against Woolworths by the Australian Competition and Consumer Commission. 

According to Maurice Blackburn, Woolworths said in its defence to the ACCC proceedings that it had forecast in October 2014 that there would be a variance in its gross profit before freight of $53 million. 

The competition watchdog's case was launched in December 2015 and related to the company's dealings with suppliers to plug a profit shortfall after discovering a $50 million hole in its books. The Federal Court last year ruled the conduct towards suppliers was not unconscionable.