Ruchi Soya’s (FPO) follow-up offer closes on March 28.
New Delhi:
Yoga teacher Ramdev led Patanjali Ayurved-owned Ruchi Soya in the capital market on Thursday to raise Rs 4,300 crore through the follow-up offering (FPO) as it aims to become a debt-free company.
The issue closes on March 28. The price range is set at Rs 615 to Rs 650 per share.
At a press conference here, Ramdev said the company has launched its FPO despite stock market volatility due to the war between Russia and Ukraine.
He said the company has already raised Rs 1,290 crore from anchor investors on Wednesday and expressed confidence that its FPO would be a huge success as people have confidence in its products and brand.
Ramdev said the proceeds from the FPO would be used to cancel the Rs 3,300 crore term loan.
“Ruchi Soya will become debt free,” he claimed.
When asked why the price range has been kept lower than current market prices, Ramdev said this was done to give investors good returns.
Ruchi Soya shares closed at Rs 897.45 apiece on the BSE on Wednesday.
“We flipped the Ruchi Soya after acquiring it through insolvency proceedings,” Ramdev said.
He said the company went bankrupt because of the mistakes of the previous management.
“We run the business with transparency, accountability and corporate governance,” he said.
Currently, the Patanjali Group owns about 98.9 percent stake in Ruchi Soya.
Public shareholders have a stake of approximately 1.1 percent.
After the FPO, Patanjali Group’s stake in Ruchi Soya will be reduced to about 81 percent and the public to about 19 percent.
The Securities and Exchange Board of India (SEBI) has given the go-ahead for the launch of the Ruchi Soya FPO in August 2021, after the company submitted the draft red herring prospectus (DRHP) in June 2021.
The company is launching the public offering to meet the SEBI standard of a minimum 25 percent public shareholding in a publicly traded entity. It has about three years to reduce the promoters’ stake to 75 percent.
Ruchi Soya will use the proceeds of the issuance to further the company’s business by repaying certain outstanding loans, meeting increasing working capital requirements and other general corporate purposes.
In 2019, Patanjali acquired Ruchi Soya, which is publicly traded, through an insolvency process for Rs 4,350 crore.
Ruchi Soya is mainly engaged in oilseed processing, the refining of crude edible oil for cooking oil, the production of soybean products and value-added products. The company has an integrated value chain in the palm and soy segments, with a farm-to-table business model.
It has brands like Mahakosh, Sunrich, Ruchi Gold and Nutrela.
