Patanjali Foods shares plunge 5% on freeze of promoter shares

Shares of Patanjali Foods fell over 5 per cent in Thursday's trade, as stock exchanged froze promoters shares due to non compliance of minimum public shareholding (MPS) norms. While Patanjali Foods said its promoters are confident of achieving MPS norms within next few months, the scrip was under selling pressure in morning trade.

The stock fell 4.77 per cent to hit a low of Rs 915 on BSE. Patanjali Foods said its promoters’ equity shares are already under lock, adding that the fresh development will have no impact on its financial position, as promoter shares are not pledged.

Patanjali Foods said its promoters tried taking suitable steps as to achieve the MPS in timely a manner, but could not due to the Covid outbreak and market conditions prevailing at that point of time.

It later came out with an Rs 4,300 crore follow on public offer in March 2022 and allotted 6,61,53,846 equity shares to public, increasing its public shareholding increased to 19.18 per cent. Since, at present, 19.18 per cent shares in the company are held by public shareholders, the company is required to further increase its public shareholding by 5.82 per cent to achieve the MPS.

Patanjali Foods said the action against its promoters would have no any impact on its financial position, as it continues its "journey of registering robust business and financial performance."

Patanjali Foods said its promoters are fully committed to the mandatory compliance of achieving minimum public shareholding and that they are discussing various modes best suited for increasing the public shareholding. "They are confident of achieving mandatory MPS within next few months," Patanjali Foods said.

To recall, Patanjali Foods, erstwhile Ruchi Soya Industries, went into corporate insolvency resolution process with effect from December 15, 2017. It was later acquired by Patanjali Group in 2019. Owing to the allotment of the equity shares made pursuant to the implementation of resolution plan, the aggregate shareholding of the promoter and promoter group of the company jumped to 98.87 per cent of the total issued, paid up and subscribed equity share capital of the Company.

Patanjali was required to bring the public shareholding to 25 per cent within a maximum period of three years from the date of such fall.

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