Ruchi Soya Industries FPO to open on March 24 at Rs 615-650 a share

Ruchi Soya Industries FPO to open on March 24 at Rs 615-650 a share

FPJ Web DeskUpdated: Monday, March 21, 2022, 02:05 PM IST
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The FPO consists of fresh issuance of Equity Shares for an amount aggregating to Rs 4,300 crore. / Representational image |

Ruchi Soya Industries Limited, a part of the Patanjali Group, has fixed a price band at Rs 615 to Rs 650 per share for its follow-on public offer.

The follow-on public offering (FPO) of Ruchi Soya Industries Limited will open on Thursday, March 24, 2022 for subscription and will close on Monday, March 28, 2022.

The FPO consists of fresh issuance of Equity Shares for an amount aggregating to Rs 4,300 crore. The issue also includes a reservation of up to 10,000 Equity Shares for subscription by eligible employees

The Company, in consultation with the book running lead managers to the issue, considered participation by Anchor Investors in accordance with the SEBI ICDR Regulations, whose participation shall be one Working Day prior to the Bid/Issue Opening Date, i.e. Wednesday, March 23, 2022.

The issue being made through the Book Building Process, in compliance with Regulation 129(1) of the SEBI ICDR Regulations, wherein not more than 50 percent of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15 percent of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35 percent of the Offer shall be available for allocation to Retail Individual Bidders.

The Company 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, one of India’s leading FMCG and health and wellness company. On the back of Patanjali group’s over 14 years experience in the nutraceutical and wellness products, Ruchi Soya has launched its nutraceuticals under the joint branding of ‘Patanjali and Nutrela’.

SBI Capital Markets Limited, Axis Capital Limited and ICICI Securities Limited are the book running lead managers to the Issue (“BRLM”).

Expert's view

Aayush Agrawal, Senior Analyst, Swastika Investmart Ltd. on Ruchi Soya FPO, said, "Ruchi Soya is coming out with its FPO of Rs 4,300-crore and it will utilize the entire issue proceeds for furthering the company's business by repayment of certain outstanding loans, meeting its incremental working capital requirements, and other general corporate purposes. The promoters currently have a nearly 99 percent stake in the edible oil major. The company needs to dilute a minimum 9 percent stake in this round of the FPO. The post-issue market capitalization will be Rs 22,494 – 23,530 crore with an equity dilution of 18.25 percent-19.11 percent.

"It 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.

"If we look at the valuations then the stock is trading with a PE of around 32 which is lower than the industry average. Patanjali group wants to make this FPO successful so that they can come out with more FPOs successfully whereas they are also likely to come out with IPOs of their other segments. We have a neutral rating for this FPO however aggressive investors can apply for long-term."

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