Ruchi Soya allots shares worth Rs 1,290 cr to anchor investors ahead of FPO

Ruchi Soya Industries has allotted shares worth Rs 1,290 crore to anchor investors ahead of its Rs 4,300-crore follow-on public offering (FPO). A total of 19.83 million shares were allotted at Rs 650 apiece.

Some of the foreign investors given allotment, including Société Générale, BNP Paribas, Oman Pension Fund, and YAS Takaful, had made an application in the anchor category. Among domestic investors, SBI MF, Kotak MF, Birla MF, HDFC Life Insurance, Ask Group, and Quant MF have got an allotment.

Ruchi Soya has priced its FPO in the range of Rs 615-Rs 650 per share. The issue price is 27-32 per cent lower than Wednesday’s closing price of Rs 897 per share. The FPO proceeds will be used by the company to pare debt.

The Baba Ramdev-led Patanjali Ayurved owns 98.9 per cent stake in Ruchi Soya. The FPO is being done to dilute the promoter holding in the company in order to comply with the 25 per cent minimum public shareholding norms. Following the FPO, Patanjali’s shareholding will reduce to 81 per cent, while public shareholding will rise to 19 per cent.

Ruchi Soya is primarily engaged in manufacturing and selling of edible oil and soya products under brands, such as Mahakosh, Sunrich, and Nutrela.

“Ruchi Soya has a strong backup from the Patanjali group and we are seeing a turnaround in the company where it managed to turn profitable. It has a strong product portfolio and is one of the largest fully integrated edible oil refining companies in India. The stock is trading with a price-to-earnings multiple of 32, which is lower than the industry average,” said Aayush Agrawal, senior analyst, Swastika Investmart.

For the quarter ended December 2021, Ruchi Soya clocked a net profit of Rs 234 crore on revenues of Rs 6,280 crore. At the current market price, the company commands a market cap of around Rs 26,900 crore.