Patanjali's Non-Retail Portion OFS Fully Subscribed, Strong Investor Interest

The retail segment of Patanjali Foods' Offer for Sale (OFS) received full subscriptions, leading to a 5% upper circuit for its shares. On the other hand, the non-retail portion witnessed an overwhelming oversubscription of 200%.

Latest Updates: Baba Ramdev-led FMCG giant Patanjali Foods witnessed full subscription for the retail portion of its Offer for Sale (OFS) on Friday. Despite the shares in the OFS being offered at a discounted floor price of ₹1,000, the stock achieved a 5% upper circuit, trading at ₹1,225 on the BSE.

The cut-off price for the non-retail category was set at ₹1,103.80 based on the bids received. Retail investors, categorized as those investing less than ₹2 lakh, can apply for a maximum of 181 shares.

On Thursday, the non-retail portion of the OFS saw a significant oversubscription of 200%. The total bids received amounted to nearly 4.56 crore shares, while only 2.28 crore shares were available for non-retail buyers. Retail investors will have their bidding opportunity on Friday.

Patanjali Ayurved, the parent company, received offers for 1,20,27,936 shares with a 100% margin, and bids for 3,36,04,276 shares were received with no margin. Patanjali Foods' shares surged by 5% to ₹1,224.95 on the BSE.

To boost public float and meet listing requirements, Patanjali Ayurved announced that it will sell up to 2.53 crore shares in its subsidiary Patanjali Foods Ltd on stock exchanges.

The OFS was scheduled over two days, with non-retail investors receiving the offer on July 13 and retail investors on July 14. The promoter firm intends to sell up to 7% of its shareholding (2.53 crore shares) at a floor price of ₹1,000 per share.

Initially, an additional 2% was planned to be sold in case of oversubscription, but Patanjali Ayurved decided not to exercise this option without providing a reason.

As of June 30, 2023, the promoters held 80.82% of the company, which needs to be reduced to 75% to comply with Sebi regulations requiring a minimum public shareholding of 25%. Jefferies India and IIFL Securities are the bankers for the offer.

According to Trendlyne statistics, the stock has an average target price of ₹1,405, indicating a 15% upside potential. One analyst has given it a 'Strong Buy' consensus recommendation.