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Patanjali Foods stock in focus on freeze of promoter shares; firm issues clarification

Patanjali Foods

Patanjali Foods stock in focus on freeze of promoter shares

Patanjali Foods stock will be under scrutiny on Thursday morning, as stock exchanges have frozen the promoters’ shareholding in the company for failing to meet minimum public shareholding requirements. The FMCG company stated that the action against its promoters will have no effect on its financial position as it continues its “journey of registering robust business and financial performance.”

According to a BSE filing, the company’s promoters are fully committed to the mandatory compliance of achieving minimum public shareholding and have been discussing various modes best suited for increasing public shareholding.

“They are optimistic about achieving mandatory MPS in the coming months,” Patanjali Foods said.

Patanjali Foods stock

Patanjali Foods stated that its promoters’ equity shares are already locked in under the Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018 until April 2023 – one year from the date of listing, which is April 8, 2023.

As a result, the company sees no impact from the stock exchanges’ actions. Patanjali Foods also stated that the equity shares of its promoters are not pledged.

Patanjali Foods, formerly Ruchi Soya Industries, entered the corporate insolvency resolution process on December 15, 2017. Patanjali Group later purchased it in 2019.

The aggregate shareholding of the promoter and promoter group of the company increased to 98.87% of the total issued, paid up, and subscribed equity share capital of the Company as a result of the allotment of equity shares made pursuant to the implementation of the resolution plan.

Patanjali was required to increase the public shareholding to 25% within three years of the date of such fall.

The company stated that its promoters attempted to take appropriate steps to achieve the MPS in a timely manner, but were unable to do so due to the Covid outbreak and market conditions at the time. Later, in March 2022, the company issued a further public offer of equity shares worth Rs 4,300 crore, allotting 6,61,53,846 equity shares to public (non-promoter entities), bringing the public shareholding to 19.18%.