Patanjali Foods Limited on March 16 said that action against the company's promoters and the promoters' group will not affect the business, in statement to the stock exchanges.
Bourses have put a freeze on the shares held by promoters and promoter entities of Patanjali Foods, a subsidiary of Patanjali Ayurved, over the failure to meet the minimum public shareholding norm, a regulatory filing stated on March 15.
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A total of 292.58 million equity shares have been put on freeze by the stock exchanges, the filing said. Patanjali Ayurved is among the 21 promoter and promoter group entities against whom the action has been taken.
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As per the rules mandated by the Security and Exchange Board of India (SEBI), at least a 25 percent stake in a listed entity must be held by public shareholders. The stake held by public shareholders in Patanjali Foods stood at 19.18 percent as of December-end.
The company, earlier known as Ruchi Soya, had undergone an insolvency resolution process which was initiated by the National Company Law Tribunal in 2017. The resolution plan, as submitted by Patanjali Ayurved, received the tribunal's nod in 2019.
After the resolution plan was implemented, Patanjali Foods' public shareholding contracted to 1.10 percent. As per the regulatory norms, a company that undergoes insolvency process gets a period of three years to increase its minimum shareholding to 25 percent.
To comply with the norm, Patanjali Foods had launched a follow-on public offer (FPO) in March 2022. It succeeded in increasing the public shareholding to 19.18 percent by issuing a total of 66.2 million shares.
However, the company could not increase its public shareholding since then. A failure to meet the SEBI's three-year deadline to increase the stake to 25 percent has led to the freezing of promoter shares.
Patanjali Foods' shares settled at Rs 964.40 at the NSE, which was 1.3 percent higher as against the previous day's close.
The company, in the quarter ended December 2022, had posted a net profit of Rs 269 crore, which was 15 percent higher than the year-ago period. Its revenue had also climbed by 26 percent on-year to Rs 7,926 crore.