Indian FMCG giant Patanjali Ayurved is reducing its stake in local edible oil supplier Patanjali Foods.

Patanjali Ayurved acquired what was the former Ruchi Soya Industries business in 2019 but the market regulator – the Securities and Exchange Board of India – has a requirement that a minimum of 25% of the shares in listed companies should be held by individual investors, otherwise known as retail investors.

The investor planned to sell a total 9% stake this week through two tranches. One involving the sale of about 25.3 million shares to both individual and institutional investors equal to a 7% holding in Patanjali Foods.

Plus a further sale of around 7.2m shares equating to 2% in the form of an oversubscription option, according to a filing from Patanjali Ayurved with the Bombay Stock Exchange and the National Stock Exchange (NSE) of India.

However, due to demand from retail investors in the first offering today (13 July), Patanjali Ayurved said in a new filing it had decided not to exercise the oversubscription option.

Reuters reported that Patanjali Ayurved owns 40% of Patanjali Foods directly, but when so-called ‘promoters’ or ‘influential shareholders’ are included, the holding amounts to close to 81%.

Patanjali Foods, which generated revenue in the year to 31 March of Rs315.2bn ($3.8bn), owns the Ruchi Gold, Mahakosh and Sunrich cooking oil brands, among others. The company also produces ghee, soya-based foods and biscuits, with an addition to the snacks portfolio in 2021 with the acquisition of Patanjali Natural Biscuits when still trading as Ruchi Soya.