Patanjali shares extend rally for third straight session as Adani investor GQG buys stake

Shares of Baba Ramdev-led Patanjali Foods gained over 1% in early trade on Tuesday, extending its rally for the third straight session, after the U.S.-based GQG Partners, which recently made billions of dollars of investments in billionaire Gautam Adani-led Adani Group firms, picked up stake in the FMCG company. The FMCG stock has gained nearly 9% in the last three sessions.

Rajiv Jain-led GQG has acquired a 5.96% stake, or about 2.15 crore shares, in Patanjali Foods in the recently concluded offer for sale (OFS) of the company by the promoter, Patanjali Ayurved. The value of the investment is estimated to be around ₹2,400 crore at the floor price of ₹1,103.80 per share for non-retail investors.

GQG Partners grabbed the headlines in March this year after the American equity investment boutique made the investment in Adani Group firms following the Hindenburg report. The Rajiv Jain-led firm has invested around $3.2 billion in Adani Group companies through funding rounds and also proposed to participate in the group’s future fundraising activities. 

Early today, Patanjali Foods shares opened lower at ₹1,247 against Monday’s closing level of ₹1,254.70 on the BSE. In the first two hours of trades so far, the FMCG stock gained as much as 1.2% to hit a high of ₹1,270, while the market capitalisation increased to ₹45,684 crore.

The stock hit a 52-week high of ₹1,495 on September 22, 2022, and a 52-week low of ₹851.70 on March 20, 2023. The counter has risen 19% in the last one year and 6% in the six-month period. In the calendar year 2023, the largecap stock added 6%, whereas it climbed 8.6% in a month and 3.7% in a week.

Patanjali Foods launched the OFS on July 13, in which its promoter, Patanjali Ayurved proposed to offload up to 25,339,640 equity shares of face value of ₹2 each, representing 7% of the total paid-up equity share capital of the company. For non-retail investors, the issue opened on July 13 at a floor price of ₹1,103.80, and for non-retail investors at ₹1,000 on July 14. GQG made its bid through the non-retail investor category.

As per the exchange data, the quota reserved for non-retail quota was subscribed over 2 times, while the retail portion was booked 3 times.

The promoter sold stake in the company to meet the minimum public shareholding norms. As of June 30, 2023, Patanjali Ayurved held 14,25,00,000 shares, or 39.37% stake, in Patanjali Foods. Overall, the promoter group owned 29,25,76,299 shares, or 80.82% stake, in the company through five entities, which is higher than the maximum permissible public shareholding limit of 75%. The company has to increase its public shareholding from 19.18% to 25% as mandated by the Securities and Exchange Board of India (SEBI) for a listed business.

Patanjali acquired Ruchi Soya in a ₹4,350-crore deal in December 2019. In March last year, Ruchi Soya raised ₹4,300 crore from its follow-on public offering (FPO) to pay debt and achieve the minimum public shareholding of 25%. In April last year, the edible oil maker was renamed Patanjali Foods to enhance synergies with Patanjali Ayurved’s food portfolio. 

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