Patanjali Foods' OFS opens for retail investors; shares hit 5% upper circuit

economictimes.indiatimes.com:

Patanjali Foods hit the 5% upper circuit at Rs 1,225 in Friday's trade on BSE after the two-day offer for sale (OFS) by promoter Patanjali Ayurved opened for retail investors today. The OFS was to be executed over two days, with the offer opening for non-retail investors on July 13 and for retail investors on July 14. According to an exchange filing on Wednesday, the promoter entity is looking to sell up to 7% stake (2.53 crore shares) at a floor price of Rs 1,000 per share.

It was also supposed to sell another 2% in case there was an oversubscription. However, Patanjali Ayurved said on July 13 that it will not utilise the 2% oversubscription option (also called the greenshoe option). It did not mention the reason behind the change of mind.

“We wish to intimate the Stock Exchanges of our intention not to exercise the Oversubscription Option. Accordingly, the total Offer size will be the Base Offer Size,” the promoter of the company Patanjali Ayurved said. “Consequently, 25,33,964 equity shares would be reserved for allocation to Retail Investors, subject to receipt of valid bids, as part of the Offer on July 14, 2023,” it said.

The floor price for the offer has been fixed at Rs 1,000, which is an 18% discount on Wednesday's closing price of Rs 1,228. On a year-to-date basis, Patanjali Foods stock has risen over 2%, while it has rallied 17% in the last one year. The promoters held an 80.82% stake in the company as of June 30, 2023, which needs to be reduced to 75%.

Sebi norms mandate a listed entity to have a minimum public shareholding (MPS) of 25%. Jefferies India and IIFL Securities are the bankers on the offer for sale. As per Trendlyne data, the average target price of the stock is Rs 1,405, which shows an upside