Patanjali Foods likely to sell stake through FPO, What it means for shareholders?

Patanjali Foods FPO: Stock Exchanges BSE and NSE have frozen the shares of Patanjali Foods (formerly known as Ruchi Soya Industries Ltd) for not meeting the public shareholding requirement in the stipulated time. Sanjeev Asthana, Chief Executive Officer, Patanjali Food Ltd in an exclusive interview with Zee Business said that the company had a deadline till December 2022 which they couldn’t meet. 

“The deadline for meeting the 25 per cent public shareholding was till December 2022 and due to market volatility, we could meet the deadline and thus the bourse has taken this action,” said Asthana. 

प्रोमोटर होल्डिंग पहले से ही लॉक हैं...SEBI के आदेश का कारोबार पर कोई असर नहीं : संजीव अस्थाना, CEO, पतंजलि फूड्स

देखिए #PatanjaliFoods के CEO @asthana_sanjeev से खास बातचीत@PypAyurved @Patanjali_foods @yogrishiramdev @AnilSinghvi_ @AshishZBiz pic.twitter.com/7uLUm9508g

— Zee Business (@ZeeBusiness) March 16, 2023

Baba Ramdev in an interview with PTI has ensured investors that the company will have a Follow-on Public Offer (FPO) soon which will help in reducing the promoters’ stake in Patanjali Foods.

Patanjali Foods FPO: Dilution process 

According to Baba Ramdev, currently, the promoters hold 80.82 per cent stake in the company, and through an FPO they will sell a six per cent stake which will reduce the promoter stake to approximately 75 per cent and this will align with the SEBI guideline of 25 per cent public shareholding. 

Patanjali Foods FPO: Impact on company  

Asthana has ensured people that the action taken by stock exchanges will not impact the company in any way, “The Stock Exchanges’ action will not have any impact on our financial position as we continue our journey of registering a robust business and financial performance.” 

Patanjali Foods FPO: Lock-in period till April 8, 2023

Baba Ramdev clarified that the promoters’ stake cannot be reduced until April 8, 2023, as it is the last day of the lock-in period. He added that the action taken by the bourse will not have any impact due to the lock-in period. 

Patanjali Foods FPO: Offshore investment

Baba Ramdev informed investors that the company is also in talks with offshore investors and is expecting investment from them.

Also Read: Tax harvesting: Save up to Rs 10,000 income tax on LTCG of Rs 1 lakh through this method