Patanjali Directed By Arbitration Tribunal To Give 1.86 Crore Shares To Ashav Advisory LLP

Patanjali Ayurved's subsidiaries were directed by the Arbitration Tribunal to give 1.86 crore marketable equity shares of Patanjali Foods Ltd. to Ashav Advisory LLP, according to an exchange filing on NSE.

The shares are to be given to Ashav Advisory within a period of 90 days.

Ashav Advisory is to pay the subsidiary companies: Patanjali Ayurved Ltd., Patanjali Parivahan Private Ltd., Divya Yog Mandir Trust, Patanjali Gramudhyog Nayas, and Patanjali Foods within seven days of receiving the shares.

Patanjali Foods claimed that it had strong grounds to dispute the award and is planning to challenge it through legal means.

This arbitration is a result of disagreements between Patanjali Foods and Ashav Advisory LLP regarding a resolution plan for the financial bankruptcy process of Ruchi Soya Industries Ltd., whose stake was acquired by Patanjali Ayurved and repurposed to form Patanjali Foods.

Two Memoranda of Understanding were filed between the parties regarding the resolution. Ashav Advisory filed a petition requesting legal arbitration to resolve the disputes arising from disagreements over the terms of these Memoranda.

Patanjali Ayurved had also sold a 2.7% stake in Patanjali Foods Ltd. on Sept. 13 in a deal worth around Rs 835 crore, with one of the buyers being a promoter group of the company: GQG Partners Emerging Markets Equity Fund.

Patanjali Foods' share price had fallen by more than 4% on Sept. 13, 2024, following a large trade. Approximately 1.1 crore shares, or 3% of the company's equity, changed hands, according to Bloomberg data.

The buyers and sellers were not immediately known.

GQG Partners bought 45 lakh shares or 1.24%, at Rs 1,854 apiece. It held a 2.17% stake in the company as of June and now the total holding is 3.41%. Patanjali Ayurved held a 32.37% stake in the company as of June. 

Share prices of Patanjali closed 1% higher at Rs 1,706.15 apiece on the NSE, compared to a 0.12% decline in the benchmark Nifty 50.

The stock has risen 8.33% on a year-to-date basis and 36.84% over the past 12 months. The relative strength index was at 163.83.

Out of the three analysts tracking the company, three have a 'buy' rating on the stock, none suggest a 'hold' and none recommend a 'sell', according to Bloomberg data. The average of 12-month analysts' consensus price targets implies a potential upside of 29.0%.