PATANJALI’S RUCHI SOYA PLANNING TO LAUNCH ₹4,000-CR FPO

MUMBAI: Edible oil company Ruchi Soya Industries Ltd, owned by Ramdev’s Patanjali Ayurved group, is planning to issue fresh shares through a follow-on public offer (FPO) in order to reduce promoter shareholding as mandated by the market regulator, said two people aware of the development.

Patanjali had acquired the erstwhile bankrupt firm in 2019 for around ₹4,350 crore through an insolvency and bankruptcy code (IBC) process. It resulted in Patanjali owning 98.9% of the firm, leaving little public float on the stock market.

With the proposed FPO, the company hopes to raise fresh capital and bring in more public shareholders to meet Securities and Exchange Board of India (Sebi) norms.

“SBI Capital, ICICI Securities and Axis Capital are advising them on the transaction,” said one of the people cited above, requesting anonymity.

The proposed sale is likely to see the company issue fresh shares worth ₹3,000-4,000 crore, said the second person.

“The FPO is beneficial for them over selling shares to institutional investors in, say, a QIP because it allows for a more free pricing regime as against a QIP which has a rigid Sebi formula. And since it is open to more investors, the float will also improve and there will be better price discovery in the secondary market,” said the second person.

The funds from the FPO are likely to be used to cut debt and fund expansion, he added.

Calls and text messages sent to a Patanjali spokesperson did not elicit a response.