Shares of Patanjali Foods promoters freeze, company said – operations will not be affected

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Shares of Patanjali Foods promoters freeze, company said – operations will not be affected

Patanjali Foods.

Patanjali Foods.

The promoters of Patanjali Foods, a subsidiary of Patanjali Ayurveda, have suffered a major setback. An exchange filing on March 15 disclosed that Patanjali Foods’ shares held by promoters and promoter entities have been barred by the exchanges from meeting minimum public shareholding norms. That is, their transactions were completely banned. But now the company said that this decision will not affect its functioning.

Clarification has been issued by stock exchanges on freezing of promoters’ stake in Patanjali Foods Ltd. Ruchi Soya Industries in Patanjali Foods Ltd on Thursday said freezing of its promoters’ stake in the company will not have any impact on its financial position and operations of the company. A total of 292.58 million equity shares have been frozen by the stock exchanges, the filing said. Patanjali Ayurved is among the 21 promoter and promoter group entities against whom action has been taken.

minimum shareholding rule

As per the rules mandated by the Securities and Exchange Board of India (SEBI), at least 25 per cent stake in a listed entity must be held by public shareholders. Public shareholders’ holding in Patanjali Foods stood at 19.18 per cent at the end of December. Shareholding pattern As of December 2022, 80.82 per cent of Patanjali Foods shares are held by the promoters and promoter entities. The company had gone through the insolvency resolution process initiated by the National Company Law Tribunal in 2017. Which was earlier known as Ruchi Soya. The resolution plan submitted by Patanjali Ayurveda was approved by the tribunal in 2019. It was only after this that Ruchi Soya became Patanjali Foods. After the implementation of the resolution plan, the public shareholding of Patanjali Foods came down to 1.10 per cent. As per regulatory norms, a company undergoing insolvency process gets a period of three years to increase its minimum shareholding to 25 per cent.

To comply with the norm, Patanjali Foods had launched a follow-on public offer (FPO) in March 2022. It managed to increase the public shareholding to 19.18 per cent by issuing a total of 66.2 million shares. However, since then the company could not increase its public shareholding. The promoters’ shares have been frozen for failing to meet Sebi’s three-year deadline to raise the stake to 25 per cent.

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