Orchid Pharma on Wednesday said stock exchanges have started freezing the shares of its promoters for the company's failure to comply with market regulator SEBI's minimum public shareholding norms within the stipulated time period.
Under SEBI norms, listed companies are required to have a Minimum Public Shareholding (MPS) of 25 per cent and stock exchanges can take action against companies, including freezing of promoters' shares, for non-compliance.
In a regulatory filing, the company said its directors have been informed that they shall not hold any new position as director in any other listed entity.
"The Directors at the meeting of Board of Directors held on May 10, 2023, have been informed that they shall not hold any new position as director in any other listed entity and that the action of freezing has been initiated by the stock exchanges against the promoters and promoters," Orchid Pharma said.
The company stated that in its effort to maintain minimum public shareholding at 25 per cent of the total shareholding, its promoter company Dhanuka Laboratories made an offer for sale representing 8.04 per cent of equity shareholding in 2021.
After the offer for sale, the promoter held 89.96 per cent of the equity shares, bringing the public shareholding to 10.04 per cent within 18 months from the date of acquiring the company, it added.
In addition to the above, the company also initiated the process of raising capital by qualified institutional placement well in time to achieve the minimum public shareholding by the end date of March 30, 2023, Orchid Pharma said.
In the last six months, the company has appointed major agencies and taken appropriate steps to ensure it meets the requirement of MPS at the earliest, it added.
"However, due to adverse market conditions, our company has been unable to launch the QIP," Orchid Pharma said.
The company has also sought relaxation for one year from SEBI to meet the minimum public shareholding requirement, it said.
The requisite fee for the same has also been deposited, it added.
The Dhanuka group took over the company in 2018.
Shares of the company ended 2.4 per cent up at ₹437.35 apiece on the BSE.