Exchanges freeze shares of Patanjali Foods' promoters for not meeting public shareholding norms

Mumbai: The stock exchanges have placed a hold on the shares owned by Patanjali Foods' promoters and promoter entities after they failed to comply with the minimum public shareholding requirement, Moneycontrol reported.

IBNS • 16 Mar 2023, 02:20 am

Patanjali Foods is a subsidiary of Patanjali Ayurved.

The regulatory filing indicated that the stock exchanges have frozen 292.58 million equity shares. This action was taken against 21 promoter and promoter group entities, including Patanjali Ayurved.

The Security and Exchange Board of India (SEBI) requires that at least 25 percent of a listed entity's stake be held by public shareholders.

However, as of the end of December, the stake held by public shareholders in Patanjali Foods was at 19.18 percent, which is below the mandated threshold.

Previously known as Ruchi Soya, the company had entered an insolvency resolution process that was initiated by the National Company Law Tribunal in 2017. The tribunal had approved Patanjali Ayurved’s resolution plan in 2019.

To meet the SEBI's requirement, Patanjali Foods had launched a follow-on public offer (FPO) in March 2022 but managed to increase its public shareholding to 19.18 percent only by issuing 66.2 million shares.

Since then, the company has not been unable to increase its public shareholding to the required limit. As the company failed to meet the SEBI's three-year deadline to increase the stake to 25 percent, the shares held by its promoters have been frozen.