Ruchi Soya FPO: Ruchi Soya, an arm of Patanjali Ayurved led by Baba Ramdev, raised up to Rs 4,300 crore in the capital markets this week with its follow-on public offering on Thursday, March 24, 2022. The company has fixed its price band from Rs 615 to Rs 650 per share. By the way, this 12% subscriber on the first day, this FPO is closing on March 28. Let us tell you that the company is planning to raise Rs 4350 crore from the capital market.
Country’s strong brand
Marwari Financial Services said that we assign “Subscribe” rating to this FPO as the company is one of the major players in Oil Palm Plantation with upstream and downstream integration and enjoys strong brand recognition in the Indian market. Moreover, it is available at a fair valuation as compared to its peers and is reasonably discounted to its current market price.
12% subscribed on first day
Patanjali-backed Ruchi Soya’s follow-on public offer (FPO) was subscribed 12 per cent on the first day of the issue, with retail investors being the highest bidder. There was a lack of demand from qualified institutional and non-institutional investors. According to NSE data, as on March 24, Ruchi Soya’s FPO received bids for a total of 56,33,880 equity shares, while the issue size was 4,89,46,260 equity shares. The portion reserved for RII was subscribed by 21 per cent with bids of 51,09,594 equity shares as against an offer of 2,44,68,045 equity shares. Meanwhile, the portion reserved for Qualified Institutional Buyers (QIBs) was subscribed to 1 per cent and non-institutional investors to 3 per cent. The issue also includes reservation of 10,000 equity shares for eligible employees, who subscribed 1.76 times the reserve share on the first day.
The company was acquired in 2019
In August last year, the company had received capital markets regulator SEBI’s nod to launch an FPO. It had filed a draft red herring prospectus (DRHP) in June 2021. The company is going through a public issue in a listed entity to meet SEBI’s minimum public shareholding criteria of 25 per cent. In 2019, Patanjali acquired Ruchi Soya through an insolvency process for Rs 4,350 crore. Ruchi Soya had said that it would utilize the proceeds of the entire issue for furtherance of the company’s business by repayment of certain outstanding loans, to meet its growing working capital requirements and other general corporate objectives.