Ruchi Soya’s Follow-on Public Issue of Rs.4,300 Crore to Open on March 24th

Ruchi Soya Ltd, which is backed by yoga guru Ramdev, has announced that its Rs.4,300 crore follow-on public offering will begin on March 24 and end on March 28. The Securities and Exchange Board of India (Sebi) approved Ruchi Soya in August 2021. Patanjali acquired the company in 2019 for its Nutrela brand of products for Rs.4,350 crore via an insolvency and bankruptcy code process.

Ruchi Soya Industries, a subsidiary of the Patanjali Group, was founded in 1986 and is one of the leading FMCG brands in the Indian edible oil sector. It is the largest manufacturer of soya foods, with a presence in upstream and downstream businesses, as well as secured palm plantations, across the entire value chain.

Edible oil and by-products, Oleochemicals, Textured Soya protein (TSP), Honey and Atta, Oil Palm Plantation, Biscuits, Cookies, and Rusks, Noodles and Breakfast cereals, Nutraceuticals and wellness, and Renewable energy wind power are some of the sectors in which the company operates. It is currently leveraging its “Neutrela” brand with a variety of premium products such as “Neutrela High Protein Chakki Aata” and “Neutrela Honey.”

Ruchi Soya owns 22 manufacturing units with a total refining capacity of 11000 tonnes per day until June 2021; currently, 16 plants are operational. It has a strong distribution network that includes 100 sales depots, 4763 distributors, and 457,788 retail outlets.

The deadline for submissions is March 28. “The FPO is made up of equity shares with face values of Rs.2 each, totaling Rs.4,300 crore. The offering also includes a reservation of up to 10,000 equity shares for eligible employees to subscribe to. If such a placement is completed, the size of the follow-on will be reduced” It was stated in a statement.

Patanjali Group currently owns approximately 98.9 percent of Ruchi Soya. Around 1.1 percent of the company is owned by public shareholders. Following the FPO, Patanjali Group’s stake in Ruchi Soya will be approximately 81%, with the public holding approximately 19%.

According to the statement, the entire proceeds of the issue will be used to further the company’s business by repaying certain outstanding loans, meeting incremental working capital requirements, and other general corporate purposes.

In order to comply with market regulator, SEBI’s requirement of a minimum public shareholding of 25 per cent in a listed business, the company is issuing the additional public offering.

“It will take about three years to reduce promoters’ stake to 75 per cent. This FPO dilution will aid Swami Ramdev’s Patanjali Ayurveda, which owns Ruchi Soya, in adhering to the minimum shareholding rules.”

During a yoga session aired on Astha TV, a video clip of Ramdev Baba went viral, urging his thousands of followers to invest in Ruchi Soya stock. Ruchi Soya was asked by Sebi to explain why the yoga guru broke the rules.

Ruchi Soya shares were relisted on January 27, 2020 at Rs.16.10 per share, and by June 9, 2021, they had reached a 52-week high of Rs.1,378. On the BSE, it is currently trading at Rs.803.70, up 0.16 percent from its previous close.