Ruchi Soya Industries' FPO sees strong demand from anchor investors

Anchor investors are making a beeline to apply in Ruchi Soya Industries’ Rs 4,300-crore follow-on public offering (FPO).

According to sources, the demand has already exceeded supply of shares in the anchor category. Ruchi Soya can allot up to Rs 1,290 crore worth of shares to anchor investors ahead of its FPO, which opens on Thursday

Sources said that among foreign investors Societe Generale, BNP Paribas, Oman Pension Fund and Yas Takaful have made an application in the anchor category. Among domestic investors, SBI MF, Kotak MF, Birla MF, HDFC Life Insurance, Ask Group and Quant MF too seem to have applied.

Institutional investors mentioned above couldn’t be reached out individually to get a confirmation. The company will formally announce the list of anchor investors later today.

Ruchi Soya has priced its FPO in the range between Rs 615-Rs 650 per share. The issue price is 28-32 per cent lower than Tuesday’s closing price of Rs 913 per share. The FPO proceeds will be used 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, the  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.