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Shares of Ruchi Soya Industries slipped 10 per cent to Rs 783.45 on the BSE in Monday’s intra-day trade ahead of closure of its follow-on public offering (FPO) today.
The stock of Patanjali-backed edible oils company traded lower for the fourth straight day, down 14 per cent during the period. It has corrected 31 per cent from its high of Rs 1,139.95 touched on March 15, 2022. At 11:07 am, Ruchi Soya traded 6 per cent lower at Rs 815, as compared to 0.71 per cent decline in the S&P BSE Sensex.
So far, the issue has subscribed 1.35 times with the FPO garnering bids for 66 million equity shares against the size of 48.9 million equity shares. The qualified institutional buyer (QIB) portion has been subscribed 0.87 per cent, while high networth individual (HNI) portion has been subscribed 3.92 per cent, retail portion 52 per cent, and the employee portion by 5.53 times, NSE data shows.
Ruchi Soya said a meeting of the board of directors of the company is scheduled to be held on March 29, 2022, for the purposes of determining the issue price and the anchor investor issue price.
The FPO consists of fresh issuance of equity shares for an amount aggregating to Rs 4,300 crore. The price band for the offer has been fixed at Rs 615-650 per share.
Ahead of the FPO, the company had raised Rs 1,290 crore from anchor investors on March 23. The company said it finalised allocation of more than 19.8 million equity shares to 46 anchor investors. Of the total allocation of 19.8 million equity shares to the anchor investors, 4.19 million equity shares (i.e. 21.10 per cent of the total allocation to anchor investors) were allocated to four domestic mutual funds through a total of 24 schemes.
“The allocation price to anchor investor was at Rs 650 per share, which may be subject to change upon determination of the issue price,” the company said.
Objectives for the fresh issue are-repayment/prepayment of Rs 2,664 crore of borrowings, funding of incremental working capital requirements of Rs 593 crore and remaining amount will be used for general corporate purposes.
As per the SEBI guidance, the minimum requirement for a public shareholding in a listed company should be 25 per cent, Thus, Ruchi Soya has announced a FPO, as the promoters of the company seek to reduce their shareholding to comply with SEBI’s guidance. At present, the promoter group i.e. Patanjali owns 98.9 per cent while public shareholders own 1.1 per cent. Post the FPO, Patanjali’s shareholding will reduce to 81 per cent while public shareholding will rise to 19 per cent.
Ruchi Soya has a well-recognized brand name, extensive distribution network and experienced management team. Going ahead, the company would continue to grow its relationship with Patanjali, focus on increasing high-margin products, and improve operating efficiency. Further, expanding the distribution network and managing the supply chain would be crucial, analyst at Religare Broking said in FPO note.
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