Retail investors can retreat from Ruchi Soya FPO

Retail investors can retreat from Ruchi Soya FPO

Issue Subscribed 3.6X, Retail portion booked 90%

Baba Ramdev-controlled Ruchi Soya has given the option to retail investors to withdraw from the company’s Follow-on Public Offer

MUMBAI, Mar (The CONNECT) – Baba Ramdev-controlled Ruchi Soya has given the option to retail investors to withdraw from the company’s Follow-on Public Offer following a SEBI directive to this effect.

SEBI order was sequel to an SMS that was circulated claiming to offer discounted rate for retail investors.

Ruchi Soya said in its regulatory filing that the company or its directors are no way connected with the SMS and an FIR has already been filed at a Haridwar police station.

The company has given time till Wednesday for the withdrawal by retail investors

The follow-on public offering has received bids of 17,60,68,935 shares against the offered 4,89,46,260 equity shares, as per the 5 pm data available on the BSE website. Overall, the issue was subscribed 3.6 times on the final day of bidding.

The portion reserved for retail investors was subscribed 0.90 times. While the Qualified Institutional Buyer category was subscribed 2.20 times, the Non-Institutional Investor category was subscribed 11.75 times and Employee Reserved category was subscribed 7.76 times.

Currently, Patanjali Group owns about 98.9 percent stake in Ruchi Soya. Public shareholders own about 1.1 percent stake. Post the FPO, Patanjali Group’s holding in Ruchi Soya will come down to about 81 percent and the public would hold about 19 percent.

The FPO comprises equity shares of face value of Rs 2 each aggregating to Rs 4300 crore. The issue also includes a reservation of up to 10,000 equity shares for subscription by eligible employees and promoters are offloading equity shares in the range of Rs 615 – 650 each.

Last week, Ruchi Soya raised Rs 1290 crore from anchor investors, who were allotted 19,843,153 equity shares at the upper price band of Rs 650 per share.

Key brokerage houses like Hem Securities Research, Marwadi Financial Services, Angel One Limited, Asit C. Mehta Investment Interrmediates Limited and Choice Equity Broking Pvt Limited have given recommendations of "Subscribe" to the issue for long term perspective while highlighting the key strengths of the company. According to brokerage houses, Ruchi Soya is one of the largest FMCG companies in the Indian edible oil sector. In terms of valuations, the post-issue FPO TTM P/E will be in the range of 26.6-34.8 times (at the upper end of the issue price band). Also company’s products enjoy strong brand recognition in the Indian market & benefit from a strong, established and extensive distribution network.
SBI Capital Markets Limited, Axis Capital Limited and ICICI Securities Limited are the book running lead manager to the Issue.

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