Patanjali Foods Bonus Issue: A Sweet Deal or Market Trap

Bonus shares reward shareholders by increasing their holdings at no cost. It also improves stock liquidity, and preserves company cash, while signalling strong financial health and growth prospects.

These advantages make bonus issue a valuable tool in equity management for both companies and investors.

Recently, a top fast-moving consumer goods company announced a bonus issue of shares. The stock in the action is Patanjali Foods.

Here's all you need to know about the bonus shares details from the company:

• The Patanjali Foods board announced on 17 July, 2025 a bonus issue of shares.
• The company has announced a bonus in the ratio of 2:1. his means that shareholders will be eligible to receive two bonus shares for every one share that they own as on the record date.
• The record date for the proposed bonus of equity shares will be determined later by the company.
• This bonus issue marks the first time the company has declared a bonus issue of shares.

So, is this Patanjali Food Bonus a Sweet Deal for Shareholders?

The proposed board meeting to announce bonus issue of shares was notified to the exchanges on 14 July 2025. The actual bonus ratio was declared on 17, July, 2025. The stock has rallied nearly 4% already since intimation to the exchanges.

The thing that investors must note is following the ex-bonus date, the stock will get adjusted. Share prices have a tendency to fall based on the ratio of the bonus shares declared.

Let's explain this with an example for better clarity. Let's assume that company Z has announced a bonus issue in the ratio of 1:1. Let's assume a day before the ex-bonus day the stock has closed at Rs 300. The next day being the ex-bonus day, the stock could correct by Rs 150 or thereabouts as shareholders buying after the ex-bonus date will not be entitled for bonus.

The stock would therefore be traded around Rs 150. We are not saying that the price would be precisely Rs 150, but, just near about. This is simply because, after the ex-bonus day you would be allotted double the shares. So, the price corrects by half. In short, your value of holdings in company Z is unlikely to change much.

What's paramount for investors here is to study the fundamentals of Patanjali Foods, its growth prospects, future plans and forget the short-term aspects.

So, is the likely bonus issue of shares by Patanjali Foods a sweet deal for shareholders? The answer lies in growth prospects and other aspects, particularly a thorough analysis of fundamentals.

A Look at the Financials of Patanjali Foods

Patanjali Foods reported a good set of numbers for FY 2024-25. FY25 clocked the highest ever annual revenue from operations. Revenues were placed at 341,570 m for FY 2025 from Rs 317,214 m in FY 2024.

Patanjali Foods Financial Snapshot (FY21-24)

(Rs m, consolidated)	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
Net Sales	131,178	163,186	242,054	315,247	317,214
Net Profit	76,720	6,808	8,063	8,864	7,652
Return on Equity (%)	227.6	16.8	16.5	9	7.5
Return on Capital Employed (%)	122.9	12.8	18.9	14.3	12.3

Source: Equitymaster

The EBITDA margin improved to 6.1% in FY 2025 , when compared to 4.8% in the previous year. The company's net profit surged by around 70%, from Rs 7,652 m in FY24 to approximately Rs 13,010 m in FY25.

The edible oil segment, which constitutes about 75% of the company's revenue, grew strongly with a 20.9% increase in Q4, helping overall growth for FY 2025.

What Next for Patanjali Foods?

The company significantly increased its advertising expenditures during FY25 (over three times the prior year), signalling aggressive marketing and brand-building efforts.

According to reports, Patanjali Foods boasts dominant market shares: 60% in Nutrela, nearly 70% in ghee, and up to 70% in edible oils.

The company plans to now capture as much as 50% of the market in hair care, dental care, and skin care.

Patanjali Foods continues to focus on building long-term sustainable partnerships with vendors to support its expansion plans and supply chain robustness.

The company also aims to expand its presence in rural markets, invest in marketing (notably increasing ad spends), and enhance distribution to improve margins and product penetration.

The brand is emphasising premiumisation of products and expects margin improvement through efficient cost management and better distribution networks.

Patanjali Foods' future roadmap involves a mix of strategic acquisitions, significant capex investment, rural market expansion, and infrastructure development like the Mega Herbal Park to drive sustainable growth and strengthen its FMCG footprint.

The company will also continue to look at product development and future expansions to drive growth.

These strategic moves indicate Patanjali Foods is focusing on improving market presence, expanding business segments, and delivering enhanced returns to stakeholders.

That said, the FMCG business in India is highly competitive. This is due to the rise of nimble D2C brands, aggressive innovation by established firms, digital and e-commerce disruption, evolving consumer demands, and cost pressures.

Also, the company's edible oil business can be impacted by fluctuations in global edible oil prices, import duty changes, and currency movements, indicating the influence of imported oil supply and pricing on its operations.

However, to counter the impact of imported palm oil Patanjali Foods is cultivating its own plantations. It has an MOU signed with Govt of Manipur under the National Mission on Edible Oils - Oil Palm and cultivate 2,700 hectares of oil palm plantations.

In FY25, Patanjali Foods imported 18,50,000 sprouts from the international markets. The company also started 2 new nurseries in Assam, 3 in Arunachal Pradesh and 1 in Andhra Pradesh.

How shares of Patanjali Foods Have Performed Recently?

Over the last one month, the share price of Patanjali Foods has gained 12%. In the past one year, shares of Patanjali Foods have gained nearly 16%.

The stock hit a 52-week high of Rs 2,030 on 4 September, 2024. The stock also hit a 52-week low of Rs 1541 on 18 July, 2024.

About Patanjali Foods

Patanjali Foods, is a prominent Indian FMCG company specialising in edible oils and healthy food products. The company was originally founded as Ruchi Soya Industries in 1986, focusing on soybean edible oil.

It has grown into a leading player in the branded edible oils market in India, also offering products under brands such as Patanjali, Mahakosh, Nutrela, and Sunrich.

The company focuses on natural, sustainable, and affordable products that cater to everyday Indian households, including soya foods, oils, multigrains, and products free from trans fats.

It has a robust distribution network, including 2 million retail touch points and 8,000 distributors. The company also exports to as many as 32 countries across the globe.

To know more check the Patanjali Foods fact sheet and latest quarterly results.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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