Patanjali Foods made an announcement on Wednesday that its promoters are planning to sell shares to institutional investors in June. The purpose of this share sale is to meet the minimum public shareholding norms, which mandate a 25% stake. As part of this plan, the promoters of Patanjali Foods intend to dilute their ownership by 6%.
Patanjali Foods Ltd (PFL), formerly known as Ruchi Soya Industries, underwent an acquisition in September 2019. The acquisition was carried out by the Patanjali Group led by Baba Ramdev through a corporate insolvency resolution process.
In an interview with PTI, Ramdev said, “We are planning to meet the minimum shareholding norms as prescribed by the market regulator SEBI.”
Furthermore, he stated that the company aims to reduce its stake by approximately 6% in June through a combination of Qualified Institutions Placement (QIP) and Offer for Sale (OFS).
“We have already started roadshow from Wednesday and there is a great interest from global investors,” Ramdev said.
Currently, the public shareholding in PFL stands at 19.18%, and it is required to be raised to a minimum of 25%.
According to Rule 19A(5) of the Securities Contracts (Regulation) Rules, 1957, it is mandatory for a listed entity to maintain a minimum public shareholding (MPS) of 25%.
PFL currently holds a market capitalization of approximately INR 38,000 crore. On Wednesday, its shares on the BSE closed at INR 1,047.85 per scrip, reflecting a 2.56% increase compared to the previous closing price.
When asked about the amount which PFL will raise through dilution of stake, its CEO Sanjeev Asthana said, “It will depend on the market condition and interest of investors.”
On the preferred route for selling shares, he said, “Either it will by QIP or a combination of QIP and OFS.”
In March, the shares of the promoters of PFL, a prominent edible oil player and a part of the Ramdev-led Patanjali Group, were frozen by the NSE and BSE stock exchanges.
At that time, PFL had notified that the prominent stock exchanges BSE and NSE had frozen the shares of 21 promoter entities, which included Patanjali Ayurved and Acharya Balkrishna. Acharya Balkrishna serves as the Managing Director of Patanjali Ayurved and is a Co-Founder of Patanjali Yogpeeth Haridwar. The freeze was initiated due to the promoter entities’ failure to meet the minimum public shareholding norms.
PFL announced on Tuesday a 12% rise in its net profit to INR 263.7 crore for the quarter ending March 2023.
In the corresponding period of the previous year, its net profit stood at INR 234.43 crore.
According to a regulatory filing, the total income of PFL increased from INR 6,676.19 crore in the corresponding period of the previous year to INR 7,962.95 crore in the fourth quarter of the last fiscal.
In the complete fiscal year of 2022-23, the net profit of PFL rose to INR 886.44 crore compared to INR 806.30 crore in the preceding fiscal year.
In the previous fiscal year, PFL’s total income surged to INR 31,821.45 crore, representing a significant increase from INR 24,284.38 crore recorded in 2021-22.