Shares of FMCG company Patanjali Foods on Thursday fell by nearly 5% to ₹916.20 apiece in trading. This was after the company announced in an exchange filing on Wednesday that stock exchanges had placed a freeze on the shares held by the company's promoters and promoter entities for failing to meet the minimum public shareholding requirement.
According to market regulator SEBI, all listed companies in India are required to maintain a minimum of 25% public shareholding. This means that at least 25% of the total shares issued by a listed company must be held by public shareholders, while the remaining 75% can be held by promoters, institutional investors, or other entities.
In the Patanjali case, the general shareholders own a 19.18% stake in the company as of December 2022, which led to the freezing of promoter shares.
Baba Ramdev-led Patanjali Ayurveda, an Indian consumer goods company, acquired Ruchi Soya Industries in 2019 and renamed it as Patanjali Foods. In January 2020, Ruchi Soya shares (now Patanjali Foods) were relisted.
The company had to increase the public shareholding to 10% within 18 months of its relisting and further to a minimum of 25% in three years. However, the deadline for the same has passed.
In March 2022, the company conducted a Further Public Offering (FPO) by issuing 6,61,53,846 equity shares of ₹2 each at a premium of ₹648 apiece, which raised a total of ₹4,300 crore. As a result, the public shareholding of the company increased to 19.18%.
The company stated in an exchange filing dated March 15, 2023, that they were in the process of exploring ways to increase their public shareholding to 25%. However, the stock exchanges sent an email freezing the shareholding of the promoters and promoter group in the meantime.
For the December quarter, the company reported a 15% increase in the net profit to ₹269.18 crore, compared to a net profit of ₹234 crore in the corresponding quarter of last year. The company had recorded a net profit of ₹112 crore in the preceding quarter.
The revenue from operations during the quarter came in at ₹7,927 crore, an increase of 26.22% from ₹6,280 crore in Q3 FY22. While the operating profit fell by 12.38% YoY to ₹368 crore. On a QoQ basis, it was up by 88%. The EBITDA margin for the December quarter stood at 5%, down by 200 basis points as compared to 7% in Q3 FY22.
Net profit climbed to ₹622.73 crore during the April-December period of this fiscal year against ₹571.87 crore the previous year. Total income rose to ₹23,858 crore in the first nine months of this fiscal year against ₹17,608 crore in the previous year.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
