Rs 4,300-cr Ruchi Soya FPO to open on Mar 24; price band set at Rs 615-650

Patanjali Ayurved group-controlled Ruchi Soya Industries will hit the capital markets with a Rs 4,300-crore follow-on offer on March 24, making the country's largest edible oil-maker the first to be re-listed after the bankruptcy process.

The management led by Ruchi Soya chairman Acharya Balakrishna and Baba Ramdev, non-executive director, on Monday announced the price-band for the issue at Rs 615-650.

At the upper end, Patanjali, which now owns 98.9 per cent of the company, will dilute around 19 per cent and 18 per cent at the lower end of the price band. The remaining 6-7 per cent, to meet the mandatory 25 per cent public float, will be diluted before the Sebi deadline of December 2022, the company said.

Ramdev said the firm will pay back Rs 3,300 crore of debt of the issuer and the rest will go for various corporate purposes. Since the takeover, they have turned Ruchi Soya from a commodities player into a branded player and is also in the process of bringing all its food products and non-food products into separate verticals.

Going forward, Ramdev said, the endeavour is to make both Ruchi and Patanjali global food brands. The group will have four business verticals under branded food, neutraceuticals, edible oils and health and wellness products.

Ruchi Soya is among the largest branded edible oil company with its flagship brand Ruchi Gold, which is one the largest selling palm oil brands in the country. Its other leading brands include Mahakosh, Sunrich, Ruchi Star and Ruchi Sunlight.

It is also the pioneer and largest manufacturer of soya foods under the brand name of Nutrela with a 40 per cent market share.

Since the takeover, Patanjali has allowed Ruchi to sell its packaged food portfolio of biscuits, cookies, rusks, noodles, and breakfast cereals, making it one of the leading FMCG, health and wellness companies.

Patanjali had in December 2018 won the bid to acquire the bankrupt Ruchi Soya along with its 22 edible oil plants and edible oil brands like Mahakosh and Ruchi Gold, and soya food brand Nutrela.

The deal involved Patanjali settling Rs 4,350 crore of dues of Ruchi Soya by infusing Rs 1,100 crore equity and Rs 3,250 crore via debt.

In December 2017, the National Company Law Tribunal started insolvency proceedings against the Indore-based Ruchi Soya on the application of Standard Chartered Bank and DBS Bank.

Ruchi Soya owed over Rs 9,345 crore to financial creditors led by State Bank of India, which had an exposure of Rs 1,800 crore, followed by Central Bank Rs 816 crore, Punjab National Bank Rs 743 crore and StanChart Rs 608 crore and DBS Rs 243 crore. Thus the resolution comes at over Rs 60 per cent haircut to the lenders.

SBI Caps, Axis Capital and ICICI Securities are the book-running lead managers to the issue.