Ruchi Soya Industries Limited, a FMCG and FMHG focused company, garnered Rs 1,290 crore from anchor investors ahead of its further public offering (FPO) that opens for public subscription on Thursday.
According to the company, the FPO is going to be only a fresh issuance of equity shares to public investors without any offer for sale component.
On March 20, the company informed the bourses that the price band for its FPO has been set at Rs 615 per equity share (at the lower end of the price-band) to Rs 650 per equity share (at the higher end of the price-band).
Societe Generale, BNP Paribas, The Sultanate of Oman - Ministry of Defence Pension Fund, Yas Takaful PJSC (an Abu Dhabi based insurance company), MK Cohesion, UPS Group and Alchemy are among the foreign investors that received allocation under the anchor investor portion of the FPO.
In addition, equity shares have been allocated to domestic investors, such as Ask Investments, Volrado Ventures, Kotak Mutual Fund, SBI Pension Fund, UTI Mutual Fund, Aditya Birla Sun Life Mutual Fund, Quant Mutual Fund, Winro Commercial, HDFC Life Insurance, SBI Life Insurance and Authum Investments under the anchor investor portion of the FPO.
Ruchi Soya has a strong portfolio of brands in various types of cooking oils under categories such as palm, soybean, mustard, sunflower, cottonseed etc. with robust brands portfolio of "Ruchi Gold", "Mahakosh", "Sunrich", Ruchi Star and Ruchi Sunlight.
Its 'Ruchi Gold' brand has a market leadership position, on account of being India's highest-selling palm oil brand, the company said. Ruchi Soya is the pioneer and largest manufacturer of soya foods in India under the brand name of "Nutrela".
Ruchi Soya has expanded its packaged food portfolio by acquiring the 'Patanjali' product portfolio of biscuits, cookies, rusks, noodles, and breakfast cereals and is a part of the Patanjali group. In the past year, Ruchi Soya also forayed into the niche and high growth FMHG segment with the launch of its Nutraceuticals products on the back of a decade of research by the Patanjali Group.
Axis Capital Limited, ICICI Securities Limited and SBI Capital Markets Limited are the book running lead manager for the FPO ("BRLM").
The FPO comprises equity shares of face value of Rs 2 each aggregating to Rs 4,300 crore. The proceeds are proposed to be used for repaying the company's lenders, supplementing the working capital requirements of the Company and other general corporate purposes which will result in further improvement in financial performance.
The FPO will open for subscription to the public on Thursday, March 24, 2022 and close on Monday, March 28, 2022.
The price band for the Offer has been determined at Rs 615 - Rs 650 per equity share. Investors can bid for a minimum of 21 equity shares and in multiples of 21 equity shares thereafter.
The FPO is being made pursuant to Regulations 103(1) and 129(1) of the SEBI ICDR Regulations, through the Book Building Process, wherein not more than 50 per cent of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15 per cent of the Offer shall be available for allocation to Non-Institutional Investors and not less than 35 per cent of the Offer shall be available for allocation to Retail Individual Investors.
Should you subscribe?
Marwadi Financial Services: Considering the FY21 EPS of Rs.18.81 on a post issue basis, the company is going to list at a P/E of 34.56x with a market cap of Rs.235,297 mn whereas its peers namely Agro Tech and Marico are trading at PE of 96.26x and 54.62x.
We assign “Subscribe” rating to this FPO as the company is one of the key players in Oil Palm Plantation with upstream & downstream integration and enjoys strong brand recognition in the Indian market. Also it is available at reasonable valuation as compared to its peers and reasonable discount to its current market price.
