Ruchi Soya FPO subscribed 33% on Day 2 on institutional interest

Investment bankers expect most of the bids to come on Monday, the final day of the issue

Ruchi Soya Industries’ follow-on public offering (FPO) was subscribed 33 per cent on Friday. The share sale closes on Monday. The qualified institutional buyer (QIB) portion was subscribed 41 per cent, high networth individual (HNI) portion 18 per cent, retail portion 36 per cent and the employee portion over four times.

Investment bankers expect most of the bids to come on the final day of the issue.

On Wednesday, Ruchi Soya allotted shares worth Rs 1,290 crore to anchor investors at Rs 650 apiece–the top-end of the price band. The lower-end of the price band is Rs 615 per share. Shares of Ruchi Soya on Thursday finished at Rs 867.

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

The company will raise Rs 4,500-crore from the FPO, which it plans to use 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 25,640 crore.

Ruchi Soya FPO Day 2

	Subscription (%)
QIB	41
HNI	17
Retail	36
Employee	318
Overall	33

 

Source: NSE, BSE; as on 4 pm