After Adani investment GQG Partners invests Rs 2,400 crore in Patanjali Foods

Florida-based investment firm GQG Partners, known for its investments in crisis-hit Adani Group companies, has now invested approximately Rs 2,400 crore in Baba Ramdev-led FMCG company Patanjali Foods.

GQG acquired a 5.96 per cent stake or around 2.15 crore shares of Patanjali through an offer for sale (OFS). The floor price was set at Rs 1,000 per share, but non-retail investors were allotted shares at Rs 1,103.80 per share, making GQG's investment worth around Rs 2,400 crore. Patanjali offered 2.28 crore shares for sale to non-retail investors as part of the OFS, representing a 7 per cent stake. The non-retail quota was oversubscribed by over 2 times, while the retail portion received 3x bids.

GQG's investment strategy

GQG gained attention earlier this year when it made a contrarian bet on Adani stocks amidst the Hindenburg controversy. Since then, GQG, led by NRI Rajiv Jain, has made multiple rounds of investments in companies owned by billionaire Gautam Adani.

Following the stake sale, Patanjali Foods' shares ended 2.43 per cent higher at Rs 1,254.70. The promoter stake in the company has been reduced from 80.82 per cent to 73.82 per cent, bringing it in line with the minimum public shareholding requirement of 75 per cent.

Patanjali's financial performance and future outlook

In the March quarter of FY23, Patanjali Foods reported a 13 per cent YoY growth in standalone net profit at Rs 264 crore, with revenue rising 18 per cent YoY to Rs 7,873 crore. The company aims to achieve an operational profit of Rs 5,000 crore and a turnover of over Rs 50,000 crore in the next five years, focusing on the FMCG business and oil palm plantations.

Mohit Nigam, Head of PMS at Hem Securities, expects Patanjali to deliver strong results and improved margins due to declining palm oil prices in Q1FY24. Vaibhav Kaushik of GCL Broking has set a target price of Rs 1,670 for Patanjali stock by Diwali, anticipating a 21 per cent return based on its performance over the past year.

Patanjali Group acquired bankrupt Ruchi Soya Industries and later rebranded the company as Patanjali Foods.