Share of Patanjali Foods fell 67%, but the real story is something else! Paisa Live | Patanjali Foods Share Fell by 67%, but the real story is something else!

On September 11, the share of Patanjali Foods saw a decline of about 67%. Investors were shocked to see this, but the reality is something else. Indeed, this decline was actually no loss, but a bonus share adjustment. Company had already announced to give Bonus Share to its investors in a ratio of 2: 1 – 2 for free on every 1 share. Due to this, the total number of shares has increased, but the total value of the company i.e. Market Cap remained the same. This led to a huge decline in the price of Share, but it was just a technical adjustment. At present, the share of Patanjali Foods is trading at about ₹ 596 and the market CAP of the company is ₹ 64,856 crore. P/e ratio has also reached around 18. By giving Bonus Share, Share reaches more people, increases liquidity and shows that the financial position of the company is strong. So next time when a sudden decline in a share is seen, first check whether it is not a bonus or split adjustment!