Ruchi Soya zooms 42% in two days on Rs 4,300 cr follow-on public offer plan

Shares of Ruchi Soya Industries surged 18 per cent to Rs 1,140 on the BSE in Tuesday’s intra-day trade, zooming as much as 42 per cent in the past two trading sessions after the company announced plans to launch Rs 4,300-crore follow-on public offering (FPO) next week.

At 02:34 pm; the stock of the company, which is owned by Baba Ramdev-led Patanjali Ayurved, traded 13 per cent higher at Rs 1,090 on the BSE. In comparison, the S&P BSE Sensex was down 1.6 per cent at 55,596. The trading volume at the counter jumped over 10-fold with a combined around 1 million equity shares changing hands on the NSE and BSE.

The stock had hit a 52-week high of Rs 1,377 on June 9, 2021, and had registered a record high of Rs 1,535 on June 29, 2020.

The edible oil firm in a regulatory filing late on Friday, Ruchi Soya said a committee of the board has approved and adopted the red herring prospectus (RHP). "The FPO comprises equity shares of face value of Rs 2 each aggregating to Rs 4,300 crore. The issue also includes a reservation of up to 10,000 equity shares for subscription by eligible employees. If such placement is completed, the follow-on size will be reduced," it said in a statement.

The FPO is being launched to comply with the 25 per cent minimum public shareholding (MPS) requirement. The promoter shareholding of Ruchi Soya is currently 98.9 per cent. FPO will remain open between March 24 and March 28.

The company proposed to utilise the proceeds towards repayment and/ or pre-payment, in full or part, of certain borrowings availed by the company and funding incremental working capital requirements of the company.

Ruchi Soya on future outlook said, the company remains confident of the medium to long-term growth prospects in edible oils, processed food, palm plantations and other businesses of the company. The company’s focus on diversified product portfolio by launch of high margin products will improve company’s profit profile. It is expected that the company will continue to register healthy growth in both revenue and margins.

The company plans to increase area under Oil Palm Plantation towards ‘Atma Nirbhar Bharat’ and reduce country’s dependence on imported oil palm, Ruchi Soya said in FY21 annual report.

As a first step towards reducing its import dependence and increasing our self-reliance, the company has secured potential procurements right for fresh fruit bunches (FFBs) that may be cultivated by farmers in potential areas.