Shares of Patanjali Foods Ltd, formerly known as Ruchi Soya Industries Ltd, rallied 3 percent in Monday's trade, after the FMCG major said that Rajiv Jain-led GQG Partners bought 2,15,64,571 shares or a 5.96 percent stake in the company on July 14. The stocks were bought through the stock exchange settlement process by the way of offer for sale (OFS), it said in a BSE filing.
The stock was trading 1.77 percent higher at Rs 1,245 apiece during late noon deals on Monday. Patanjali Foods shares have gained 8 percent in the last one month, while the stock has rallied 18.10 percent in the last one-year period.
Last week, Patanjali Foods concluded a 7 percent stake sale, with the promoter group stake falling to 73.82 percent in the FMCG major from 80.82 percent earlier, meeting the minimum shareholding norms.
Patanjali Foods were looking to offload up to 25,339,640 equity shares of face value of Rs 2 each, representing 7 percent of the total paid-up equity share capital of the company.
The FMGC major had fixed a floor price of Rs 1,000 per share for the OFS by promoter Patanjali Ayurved, which was at a steep 18.36 percent discount to its then prevailing price of Rs 1,225 on BSE. The clearing price for retail portion was Rs 1,165 and for non-retail portion was Rs 1,103.80.
The company was also supposed to sell about 7,239,897 additional shares, representing 2 percent of the total paid-up equity share capital, in case there was an oversubscription.
However, Patanjali Ayurved, on July 13, said that it will not utilise the 2 percent oversubscription option (also called the greenshoe option). It didn't 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 informed the stock exchanges.
"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 further said.
Patanjali Foods has an average target price of Rs 1750 on the counter, suggesting an upside potential of 40.5 percent from the current market levels. The consensus recommendation from one analyst for the stock is a 'Strong Buy'.
In terms of technicals, the stock's 14-day RSI (relative strength index) is at 66.2. The RSI below 30 is considered oversold, and above 70 is overbought, according to data from Trendlyne. Moving average convergence/divergence (MACD, or MAC-D) is at 42.2, which is above its center line, but below the signal line, the data showed.
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