Ruchi Soya FPO investors gain 42% in under two weeks, shares end at Rs 925

Investors who applied in the Rs 4,300-crore follow-on public offering (FPO) of Ruchi Soya Industries have seen their investment value soar 42 per cent in less than two weeks. Shares of the Patanjali Ayurved-promoted firm ended at Rs 925 compared to the FPO price of Rs 650. The 66.15 million new shares issued in the FPO, which closed on March 30, commenced trading today.

Ruchi Soya’s stock was expected to decline following the listing of new shares. Defying expectations, the stock surged 13 per cent on Friday with shares worth Rs 3,823 crore changing hands. The company’s announcement that it will become debt-free as early as next week boosted sentiment. Following the FPO, the promoter shareholding in the company has reduced from 98.9 per cent to below 82 per cent.

Market regulator Sebi had directed the company to provide the option to FPO applicants to withdraw their applications due to “circulation of unsolicited SMSs advertising the issue”. The messages circulated on social media stated that the FPO was a good investment opportunity in Patanjali Group and shares were being offered at a 30 per cent discount to the market rate. About 9.74 million FPO bids got cancelled, mainly from overseas investors.

As per a disclosure made by the company, Ruchi Soya’s FPO saw a total of 441,696 applications and the offering garnered 2.73 times subscription. The retail portion of the issue was undersubscribed at just 71 per cent and the high networth individual (HNI) portion was subscribed 12 times.

At Friday’s closing price, the company commands a market cap of Rs 33,479 crore. During the first nine months of 2021-22 (ending December 2021) Ruchi Soya reported net profit of Rs 572 crore on revenues of Rs 17,542 crore.