Patanjali Foods says not considering FPO to increase public shareholding
With stock exchanges freezing shares of its promoters, Patanjali Foods on Friday clarified that it is not considering Follow-on Public Offer (FPO) to increase public shareholding but exploring other modes like Offer For Sale through stock exchanges and qualified institutional placement.
Stock exchanges NSE and BSE have frozen the shares of promoters of Ramdev-led Patanjali Group firm Patanjali Foods, which is a major edible oil player.
In a regulatory filing, Patanjali Foods Ltd said it “is not considering undertaking another further public offering (‘FPO’) for achieving minimum public shareholding.” The company said, it is “considering all modes for achieving minimum public shareholding of the company …including by way of an Offer for Sale (OFS) through the Stock Exchange mechanism and/or Qualified Institutions Placement (QIP).”
In an interview with PTI on Thursday, Ramdev assured his investors and public shareholders that there would be no impact on Patanjali Foods operation and financial performance and its growth trajectory will remain intact.
“There is no reason for the investors to worry,” he had said.
According to Ramdev, promoters’ shares are already under lock-in as per Sebi guidelines till April 8, 2023, which is one year from the date of listing, and the latest move by stock exchanges does not appear to have a negative impact on the functioning of PFL.
Further, he said that Patanjali Foods is being operated by Patanjali group in an “ideal way” and is taking care of all factors such as the expansion of business and distribution, profitability and performance.
“We will be diluting around 6 per cent stake. There are no questions about that,” he had said, adding that the delay was because the market condition was not favourable.
Ramdev had also said the company will “start the process for FPO in April, immediately after finishing the current financial year.” The Haridwar-based group has already “lined up” offshore and domestic investors, who are ready to invest into Patanjali Foods.
“We have to dilute our equity share and there is no question about that,” he added.
On Wednesday, Patanjali Foods Ltd (PFL) informed that leading bourses BSE and NSE had frozen shares of its 21 promoter entities, including Patanjali Ayurved and Acharya Balkrishna, who is the managing director of Patanjali Ayurved and co-founder of Patanjali Yogpeeth Haridwar, for failing to meet minimum public shareholding norms.
Rule 19A(5) of the Securities Contracts (Regulation) Rules, 1957 mandates a listed entity to have a minimum public shareholding (MPS) of 25 per cent. After the company’s FPO in March, 2022, the public shareholding increased to 19.18 per cent.
Patanjali Foods Ltd was acquired by Patanjali Group under an insolvency resolution process pursuant to the NCLT approval of the resolution plan submitted by a consortium led by Patanjali Ayurved Ltd in September 2019.
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