Ruchi Soya hits capital market to raise ₹4,300 crore
NEW DELHI: Ruchi Soya hit the capital market on Thursday to raise ₹4,300 crore through its follow-on public offer (FPO) as it aims to become a debt-free company. The issue closes on 28 March. The price band has been fixed at ₹615 to ₹650 per share.
The company, which is owned by Baba Ramdev-led Patanjali Ayurved, has launched its FPO despite volatility in the stock market because of the war between Russia and Ukraine, Ramdev said at a press conference. The company raised ₹1,290 crore from anchor investors on Wednesday and expressed confidence that its FPO would be a huge success as people have faith in its products and brand.
The proceeds of the FPO would be utilized to retire a term loan of ₹3,300 crore, Ramdev said. “Ruchi Soya will become debt-free,” he said.
Ramdev said the price band has been kept lower than the current market prices to give a good return to investors. Ruchi Soya shares closed on Wednesday at ₹897.45 apiece on BSE.
“We have turned Ruchi Soya around after acquiring it through insolvency proceedings,” Ramdev said. The company became bankrupt because of mistakes made by the previous management, he said. “We are running the company with transparency, accountability and corporate governance,” he said.
Patanjali Group owns 98.9% stake in Ruchi Soya. Public shareholders own about 1.1% stake. Post the FPO, Patanjali Group’s holding will come down to about 81% and the public will hold about 19%.
The Securities and Exchange Board of India (Sebi) had given the nod for the launch of the Ruchi Soya FPO in August 2021, after the company filed the draft red herring prospectus in June 2021. The firm is coming out with the public issue to meet Sebi’s norm of minimum public shareholding of 25% in a listed entity.