Ruchi Soya Industries’ FPO sees strong demand from major investors

Fundamental investors are taking a direct line to advance Ruchi Soya Industries’ follow-up public offering (FPO) of Rs 4,300 crore.

According to the sources, the demand has already exceeded the supply of stocks in the anchor class. Ruchi Soya can allocate up to 1,290 crore of shares to anchor investors ahead of the FPO, which opens Thursday

Among the foreign investors, Societe Generale, BNP Paribas, Oman Pension Fund and Yas Takaful, have applied in the anchor category, the sources said. Among the local investors, it appears that SBI MF, Kotak MF, Birla MF, HDFC Life Insurance, Ask Group and Quant MF have also applied.

The above mentioned institutional investors cannot be contacted individually for confirmation. The company will officially announce its list of major investors later today.

Ruchi Soya has priced the FPO in the range of Rs 615 to Rs 650 per share. The issue price is 28-32 per cent lower than Tuesday’s closing price of Rs 913 per share. FPO proceeds will be used to clear debts.

Patanjali Ayurveda led by Baba Ramdev holds a 98.9 percent stake in Ruchi Soya. The FPO is made to dilute the promoter’s ownership in the company in order to comply with the public shareholding criteria of 25 percent. After the FPO, Patanjali’s contribution will decrease to 81 per cent, while the public contribution will rise to 19 per cent.

Ruchi Soya is primarily engaged in the manufacture and sale of edible oils and soy products under brands such as Mahakosh, Sunrich and Nutrela.

“Ruchi Soya has strong backing from the Patanjali Group and we are witnessing a transformation of the company as it has been able to turn a profit. It has a strong product portfolio and is one of the largest integrated edible oil refiners in India. The stock is trading in Aayush Agrawal, Senior Analyst at Swastika Investmart. At a price-to-earnings multiplier of 32 which is below the industry average.”

For the quarter ended December 2021, Ruchi Soya reported a net profit of Rs.234 crore on revenue of Rs.6,280 crore. At the current market price, the company is charging a market cap of around Rs 26,900 crore.

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