Promoter Share Freeze: Patanjali Foods Not Considering Another FPO
Stock exchanges froze Patanjali Foods promoters' shares for not meeting the minimum public shareholding norm within the deadline.
Patanjali Foods Ltd. is not pursuing another follow-on-public offer for achieving a minimum public shareholding, failure of which led to the stock exchanges freezing the promoters' shares.
The disclosure comes a day after Patanjali Group co-founder Baba Ramdev said in an interview to PTI that the company would likely begin the process of launching an FPO in April to raise public shareholding to 25%.
"Investors and shareholders are advised to not rely on any news article suggesting that the company is in the process of undertaking an FPO for achieving MPS," according to its statement filed with the exchanges on Friday. "Further, investors and shareholders are advised to refer to only corporate announcements."
The statement said the company and its promoters were considering all modes for achieving minimum public shareholding, as specified by SEBI, including by way of an offer for sale and/or qualified institutional placement.
In an interview with PTI, Ramdev, who is the non-executive director of Patanjali Foods, was reported to have said that the company was in the process of diluting around 6% stake.
India's stock exchanges had frozen 292.58 million shares of promoter group entities of Patanjali Foods on March 15, for not meeting the minimum public shareholding norm within the stipulated deadline.
The company, earlier known as Ruchi Soya, had undergone an insolvency resolution process that was initiated by the NCLT in 2017. SEBI rules mandate that a company, which undergoes an insolvency procedure, gets a period of three years to increase its minimum shareholding to 25%.
To comply with the norm, Patanjali Foods launched an FPO in March 2022. It succeeded in increasing the public shareholding to 19.18%, as of Dec. 31, by issuing a total of 66.2 million shares. But it couldn't increase its public shareholding since then. A failure to meet the deadline has led to the freezing of promoter shares.
However, the company said it is working on its compliance and the promoter shares were being locked in for a period of one year since listing, which ends on April 8, 2023. "So, the instant action of stock exchanges does not appear to have any negative impact on the functioning and financials of the company," it had said.
Shares of Patanjali Foods closed 4.43% lower on Friday on the BSE, as compared with a 0.67% gain in the Nifty 50.