Patanjali Ayurved, an Indian FMCG giant, is reducing its stake in local edible oil supplier Patanjali Foods. This move comes as the market regulator, the Securities and Exchange Board of India, requires a minimum of 25% of the shares in listed companies to be held by individual investors, also known as retail investors.
Patanjali Ayurved acquired the former Ruchi Soya Industries business in 2019. The company planned to sell a total of 9% stake this week through two tranches, with one involving the sale of shares to individual and institutional investors equaling a 7% holding in Patanjali Foods. Additionally, there was a further sale of approximately 2% in the form of an oversubscription option.
However, due to high demand from retail investors in the initial offering, Patanjali Ayurved has decided not to exercise the oversubscription option, according to a filing with the Bombay Stock Exchange and the National Stock Exchange of India.
Reuters reported that Patanjali Ayurved directly owns 40% of Patanjali Foods, and when considering ‘promoters’ or ‘influential shareholders,’ the holding amounts to close to 81%.
Patanjali Foods, generating revenue of Rs315.2bn ($3.8bn) in the year to March 31, owns popular cooking oil brands such as Ruchi Gold, Mahakosh, and Sunrich, along with ghee, soya-based foods, and biscuits. The company recently expanded its snacks portfolio in 2021 with the acquisition of Patanjali Natural Biscuits.
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