Patanjali Foods, a prominent player in the Indian consumer goods industry, witnessed complete subscription of the non-retail portion of its open offer (OFS) on July 13, 2023. The open offer, comprising 2.53 crore equity shares, was priced at ₹1,000 per share, offering a discount of 19% to the previous closing price of ₹1,228.05.
Patanjali Foods’ open offer, which was made available to qualified institutional buyers (QIBs) and non-resident Indians (NRIs), received robust subscription rates from both investor categories. The QIB portion of the offer was subscribed 1.12 times, while the NRI portion witnessed a subscription rate of 1.01 times.
Patanjali Foods, following the successful subscription of its open offer, anticipates proceeds of approximately ₹2,530 crore. The company intends to utilize these funds for various purposes, primarily focused on debt repayment and general corporate requirements.
Patanjali Foods, a subsidiary of Patanjali Ayurved Limited, holds a significant position in the Indian fast-moving consumer goods (FMCG) industry. Renowned for its diverse product portfolio, Patanjali Foods specializes in the manufacturing and sale of a wide range of products, including food, beverages, personal care items, and home care products.
The offer for sale (OFS) conducted by Patanjali Foods not only signifies strong investor confidence but also underscores the company’s remarkable growth trajectory in recent years. With its rapid expansion and strategic positioning, Patanjali Foods has garnered substantial interest from investors, positioning itself for continued growth in the future.
Patanjali Foods’ Shares Decline 5% on Announcement of Offer for Sale (OFS)
The announcement of the offer for sale (OFS) had a notable impact on Patanjali Foods’ share price, which experienced a 5% decline on July 13, settling at ₹1,166.65. The decrease in share price can be attributed to market reactions and investor sentiment in response to the news of the upcoming OFS.
Patanjali Foods has scheduled its offer for sale (OFS) to take place over two consecutive days, providing separate opportunities for non-retail and retail investors to participate. The OFS, aimed at divesting a portion of the company’s shares, will be open to non-retail investors on July 13, followed by retail investors on July 14.
The Opinions of Some Analysts on the OFS are as Follows:
Analyst Ankit Jain from ICICI Securities expressed a positive view on Patanjali Foods’ offer for sale (OFS), highlighting the full subscription as a favorable sign for the company. Jain also emphasized Patanjali Foods’ rapid growth in recent years and its promising positioning for future expansion. Such positive assessments from analysts reflect the market’s confidence in the company’s growth prospects and market standing.
Rahul Jain, an analyst at Edelweiss Securities, sees the offer for sale (OFS) as a favorable opportunity for investors to partake in the growth of Patanjali Foods. Jain’s perspective underscores the company’s strong brand presence and an expanding product portfolio, factors that contribute to its positive outlook. This assessment suggests that investors may view Patanjali Foods as an attractive investment option considering its potential for continued growth and market expansion.
The full subscription of the non-retail portion of Patanjali Ayurved’s offer for sale on the first day highlights strong investor confidence and market interest in the company. This achievement serves as a validation of Patanjali’s brand equity, robust financial performance, and commitment to Ayurveda. The funds raised through this divestment will fuel the company’s growth initiatives, enabling it to further consolidate its market presence and explore new avenues. Patanjali Ayurved’s success in the OFS reflects its ability to attract institutional investors and signals a promising future for the company in the Indian FMCG sector.