Ruchi Soya FPO opens for Public Subscription today

Ruchi Soya Industries FPO | The company’s foray into other FMCG and FMHG products, including oleochemicals, biscuits, rusks, wheat flour, honey and nutraceuticals, bodes well for its mid to long-term business growth, KR Choksey has said.

Patanjali-backed Ruchi Soya Industries has raised Rs.1,290 crore from anchor investors ahead of its further public offering (FPO), which opens for public subscription today, 24 March 2022. The FPO consists of fresh issuance of equity shares for an amount aggregating to Rs.4,300 crore. The firm has allocated 1.98 crore equity shares at the upper price band at Rs.650 per equity share to anchor investors such as Societe Generale, BNP Paribas, The Sultanate of Oman – Ministry of Defence Pension Fund, among others.

Patanjali, which owns a 98.90 per cent stake in the company, was mandated to bring its ownership to 75 per cent or below within three years of buying. It has already been two years and thus it needs to sell its shares. While Ruchi Soya has high debt on the books, it plans to utilise most of the FPO proceeds for repayment of its debt in the next few months.

Analysts at Marwadi Financial Services have also given a ‘subscribe’ rating to the FPO, as the company is one of the key players in Oil Palm Plantation with upstream and downstream integration and enjoys strong brand recognition in the Indian market. Also it is available at reasonable valuation as compared to its peers and reasonable discount to its current market price “Considering the FY21 EPS of Rs.18.81 on a post issue basis, the company is going to list at a P/E of 34.56x with a market cap of Rs.235,297 mn whereas its peers namely Agro Tech and Marico are trading at PE of 96.26x and 54.62x,” it said.

Half of the issue size has been reserved for qualified institutional buyers (QIBs), 35 per cent for the retail investors and the remaining 15 per cent is for non-institutional bidders. The applicants also must note that the cut-off time for UPI mandate confirmation is Tuesday, March 29, 2022, upto 12:00 pm. If they fail to do so then their application may not be considered.