Ruchi Soya buys biscuits, noodles unit from Patanjali for Rs 65 cr

Ruchi Soya to use FPO fund to repay debt

Ruchi Soya Industries, a company now owned by Patanjali Ayurved, will use Rs 2,663 crore from its share sale to repay part of its debt and utilise another tranche of Rs 593 crore as working capital of the firm.
 
Just before the follow-on public offer (FPO), the company has acquired biscuits and noodles units from entities owned by its promoters for around Rs 65 crore.
 
In its prospectus, Ruchi Soya said the share sale proceeds will be utilised towards prepayment and/or repayment of debt availed in the form of non-convertible debentures (NCDs) and other instruments issued by the company to one of its promoters.  "We believe that such prepayment will help reduce our outstanding indebtedness and debt servicing costs, and enable utilisation of our accruals for reinvestment in our business growth and expansion," it said.
 
The firm said 98.87 per cet of its pre-issue paid-up capital is held by Patanjali Ayurved, Yogakshem Sansthan, Patanjali Parivahan, and Patanjali Gramudyog Nayas.

 
The share sale shall help the promoters bring down their stake from 98 per cent to meet Sebi norms on minimum public shareholding of 25 per cent. After Patanjali took over the company, its shares were relisted in January last year. Since then, the stock has skyrocketed and the company's market capitalisation has touched Rs 37,000 crore —due to low liquidity in the stock. As of Tuesday, its shares traded at Rs 1,250 a share.  The promoters are likely to dilute their stake by 9 per cent in the company via the FPO.
 
The promoter entities, the company said, have pledged their shares in Ruchi Soya to a consortium of banks, including to State Bank of India, Union Bank of India, Canara Bank (erstwhile Syndicate Bank), Indian Bank (erstwhile Allahabad Bank), and Punjab National Bank.
 
The company also revealed that it took over a few businesses owned by its promoters in May and June.
 
Ruchi Soya said it has also acquired the noodles and breakfast cereal business from Patanjali Ayurved this month.