Patanjali Foods shares crash 67%! But that's just optical

Shares of Patanjali Foods plunged 66.7% on Thursday, but investors have little reason to worry. The sharp decline reflects a technical price adjustment as the stock turned ex-bonus following the company’s recently announced 2:1 bonus share issue.

Under the terms, shareholders received two additional shares for every one held. The record date was September 11, with the adjustment taking effect the next trading day.

With the number of outstanding shares tripling, the stock price fell proportionally to align with the revised capital structure. The move does not affect the company’s market capitalization or shareholder wealth.

What’s really happening?

For example, if you owned one share worth Rs 3,000 before the bonus, you now hold three shares worth Rs 1,000 each. Your total investment value remains unchanged. Such price movement is purely mathematical and not a reflection of the company’s performance.

Why bonus shares?

Bonus issues are often seen as a sign of management’s confidence in future earnings. For Patanjali Foods, the move also improves stock liquidity and makes shares more accessible to retail investors.

Patanjali Foods’ stock performance

Over the past year, Patanjali Foods has declined 6.75%, while its year-to-date (YTD) change shows a marginal drop of 0.32%. In shorter periods, the stock gained 3.00% in six months and 6.84% in three months, but edged down 0.13% in the last month.

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