Patanjali Foods announces its first ever bonus issue

Patanjali Foods on Thursday declared its inaugural bonus share issue. "The company will issue shares in the 2:1 ratio," it said in an exchange filing. The development comes following a board meeting held on Thursday, July 17. Shareholders will be eligible to receive two bonus shares for each share owned, although the record date has yet to be specified. The announcement coincides with the company's stock trading at Rs 1,864.3, having gained 11% over the past five sessions, thus maintaining a positive trajectory for the year.

Baba Ramdev-led Patanjali Foods, formerly Ruchi Soya, was acquired by Patanjali Ayurved in 2019 for Rs 4,350 crore. This acquisition marked a strategic move through an insolvency process. Additionally, in 2022, the company initiated a Follow-on Public Offer (FPO) to raise ₹4,300 crore, largely aimed at settling existing debts from Ruchi Soya.

The stock's recent performance has been buoyant despite the bonus issue announcement, reflecting investor confidence in the company's financial maneuvers. The company's strategic initiatives and financial discipline have played a crucial role in strengthening its market position.

Historically, Patanjali Foods has consistently distributed dividends, including an interim dividend of ₹8 per share and ₹6 per share in November and March 2024, respectively. This proactive approach in returning value to shareholders is further amplified by the bonus share issue.

Market analysts are closely monitoring how this development impacts the company's stock and broader market sentiment, as Patanjali Foods continues to expand its strategic initiatives post-acquisition. The company's growth trajectory is expected to maintain momentum as it optimises its market presence and operational strategies.

With these moves, Patanjali Foods is set to enhance shareholder value and sustain its upward momentum.