Patanjali Foods shares witnessed a 5% lower circuit as the two-day offer for sale (OFS) by promoter Patanjali Ayurved Limited commenced. The stock fell to Rs 1,167 on BSE during Thursday's trading session. According to an exchange filing on Wednesday, Patanjali Foods plans to sell up to 9% stake or 3.26 crore shares of the company in the OFS, which will take place on July 13 and July 14. The OFS will be executed over two days, with the offer opening for non-retail investors on July 13 and for retail investors on July 14.
The floor price for the offer has been fixed at Rs 1,000 per share, representing an 18% discount to Wednesday's closing price of Rs 1,228. If the offer is subscribed at the floor price, the OFS could generate approximately Rs 3,260 crore for the promoters. The base size of the offer is 2.53 crore shares, equivalent to 7% of the total paid-up equity capital, with an additional 72.39 lakh shares (2% of the overall stake) to be offloaded in the case of oversubscription.
Year-to-date, Patanjali Foods stock has recorded a decline of over 2%, while it has shown a 12% increase over the past year. According to Trendlyne data, the average target price for the stock is Rs 1,405, indicating an upside potential of 21% from the current market price. One analyst has recommended a 'Strong Buy' for the stock.
The OFS is in line with SEBI norms, as the promoters are required to reduce their stake from 80.82% to 75% to meet the minimum public shareholding (MPS) requirement of 25% for a listed entity. Jefferies India and IIFL Securities are the appointed bankers for the offer for sale.
Investors will closely monitor the response to the OFS and its impact on Patanjali Foods' share price as the company aims to comply with SEBI regulations while generating capital through stake sales.
