Patanjali stock prices fall as stock markets impose freeze on promoter shares
As 292.58 million promoter shares were frozen, Patanjali Foods said despite their efforts, the company was unable to fulfill norms due to the pandemic and prevailing market conditions.
Amid promoters' shares being frozen by stock exchanges for not complying with minimum public shareholding (MPS) standards, Patanjali Foods' stock dropped more than 5 per cent during trading on Thursday. Patanjali Foods' scrip was under selling pressure in the morning even though the company's promoters expressed optimism in meeting MPS criteria over the next three months.
On BSE, the share price dropped as much as 4.77 per cent, to a minimum of Rs 915. Patanjali Foods stated the company's promoters' equity shares are already locked and that the new development will not affect the company's financial status because promoter shares are not pledged.
Under the action by the stock exchanges, 292.58 million promoter group shares of Patanjali Foods Ltd. were frozen by stock exchanges for failing to satisfy the required minimum public shareholding standard by the deadline.
According to Patanjali Foods, despite its promoters' best efforts, they were unable to timely attain the MPS because of the COVID epidemic and the market conditions that were in place at the time.
Later, in March 2022, it announced a Rs 4,300 crore follow-up public offering and distributed 6,61,53,846 equity shares to the public, raising the public's shareholding to 19.18 per cent. Since public shareholders already own 19.18 per cent of the business's shares, the corporation must further grow their shareholding by 5.82 per cent in order to meet the MPS.
It may be recalled that on December 15, 2017, Patanjali Foods, formerly known as Ruchi Soya Industries, began the process to resolve its corporate insolvency. The Patanjali Group later purchased it in 2019.
The aggregate shareholding of the company's promoters and promoter group increased to 98.87 per cent of the whole issued, paid up, and subscribed equity share capital of the Company as a result of the allotment of the equity shares made in accordance with the implementation of the resolution plan.
Patanjali had three years from the date of the reduction in the public shareholding to increase it to twenty-five per cent.
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