Patanjali Foods Limited, formerly known as Ruchi Soya Industries Limited, went into corporate insolvency resolution process with effect from 15th December 2017. This was due to an order passed by Hon’ble National Company Law Tribunal, Mumbai Bench under the Insolvency and Bankruptcy Code, 2016. The Patanjali Group acquired the company by submitting a resolution plan that was approved by Hon’ble NCLT. The plan was implemented on 18th December 2019, and the aggregate shareholding of the promoter and promoter group of the Company increased to 98.87% of the total issued, paid up and subscribed equity share capital of the Company.
As per the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a listed entity is required to comply with the minimum public shareholding requirements specified in rule 19(2) and rule 19A of the Securities Contracts (Regulation) Rules, 1957. Rule 19A(5) of SCR Rules states that if the public shareholding in a listed company falls below twenty-five per cent, then the company must bring the public shareholding to twenty-five per cent within a maximum period of three years from the date of such fall. If the public shareholding falls below ten per cent, then the same shall be increased to at least ten per cent within a maximum period of twelve months.
The public shareholding of Patanjali Foods Limited fell below 25% and 10% on December 18, 2019, as a result of implementing the resolution plan approved under the Code. Pursuant to Rule 19A(5) of SCR Rules, the MPS in the Company was required to be increased within 18 months from the date of fall in public shareholding to below ten per cent, to increase the public shareholding to at least ten per cent, and within three years from the date of fall in public shareholding to below twenty-five per cent, to increase the public shareholding to at least twenty-five per cent.
Due to COVID-19 outbreak and market conditions prevailing at that point of time, the public shareholding could not be brought up to ten percent by June 18, 2021. However, in March 2022, the Company came out with a further public offer of equity shares of Rs. 2/- each at a premium of Rs. 648/- per share aggregating to Rs. 4,300 Crores and allotted 6,61,53,846 equity shares to public (non-promoter entities). This increased the public shareholding to 19.18%. The Company is now required to further increase its public shareholding by 5.82% to achieve the MPS.
The Stock Exchanges have frozen the Promoters’ shareholding in the Company as per SEBI Circular No. CFD/CMD/CIR/P/2017/115 dated October 10, 2017. However, this does not appear to have a negative impact on the functioning or financial position of the Company. The Promoters are fully committed to achieving MPS and are exploring various ways and means to achieve it while ensuring that the interest of public shareholders is appropriately protected. The Promoters are committed to leading the Company as one of the leading FMCG players with sustainable growth.
