Patanjali Foods Locked in 5% Lower Circuit After Exchanges Freeze Promoters’ Shares
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Last Updated: March 16, 2023, 13:26 IST
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Shares of Patanjali Foods fell over on March 16 to hit the lower circuit at Rs 912.9 after bourses put a freeze on the shares held by promoters
Shares of Patanjali Foods fell over on March 16 to hit the lower circuit at Rs 912.9 after bourses put a freeze on the shares held by promoters and promoter entities over their failure to meet the minimum public shareholding norm. The fast-moving consumer goods company issued a statement on Thursday on SEBI’s action against the promoter and promoter group saying that the stock exchanges’ move against it will not have any impact on the company’s financial position.
In a filing to the exchanges, the company said it has a strong management team in place and is on the path to register a robust business and financial performance.
“We have received a communication from our promoters that they are fully committed to the mandatory compliance of achieving minimum public shareholding and they have been discussing various modes best suited for increasing the public shareholding. They are confident of achieving mandatory MPS within the next few months," the exchange filing said.
“Our promoters’ equity shares are already under lock-in as per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 till April 2023 (one year from date of listing i.e. April 08, 2023) and therefore, we do not perceive any impact of this action by the Stock Exchanges. Further, it should be noted that our promoters’ equity shares are not pledged," it added.
As many as 292.58 million equity shares have been frozen, the company said in a filing. Patanjali Ayurved is among the 21 promoter and promoter group entities against whom the action has been taken.
As per the Security and Exchange Board of India (SEBI) rules, at least a 25 per cent stake in a listed entity must be held by public shareholders. In Patanjali Foods, the stake was at 19.18 per cent at the end of the December quarter.
In an interview to CNBC-TV18, Patanjali Foods CEO Sanjeev Asthana said the company was confident of reaching the minimum public shareholding norm in a couple of months. The dilution would be through a combination of promoter offer for sale and qualified institutional placement, he said.
At 13.11 pm, Patanjali Foods was trading 2.45 per cent lower at Rs 940.75 on the BSE. The scrip has given over 800 per cent in the past three years but has fallen around 23 per cent this year.
Recently, the stock was added to the FTSE All World Index, which made investors hopeful of FII inflow.
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