Diversified FMCG and FMHG focused company, Ruchi Soya will launch its follow-on public offer (FPO) on March 24, the company said in its filing on the exchanges on March 11, 2022
The follow-on public offer (FPO) comprises equity shares of face value of Rs two each aggregating to Rs 4,300 crore. The issue also includes a reservation of up to 10,000 equity shares for subscription by eligible employees. If such placement is completed, the follow-on size will be reduced. The issue will open on March 24 and close on March 28.
After filing a draft red herring prospectus (DRHP) in June 2021, the Securities and Exchange Board of India (SEBI) approved the public issue of the Ruchi Soya FPO in August 2021. To comply with SEBI’s requirement of a minimum public shareholding of 25 per cent in a listed business, the company is issuing a further public offering. It will take about three years to reduce promoters’ stake to 75 per cent. This FPO dilution will aid Baba Ramdev’s Patanjali Ayurveda, which owns Ruchi Soya, in adhering to the minimum shareholding rules.
Currently, Patanjali Group owns about 98.9 per cent stake in Ruchi Soya. Public shareholders own about 1.1 per cent stake. Post the FPO, Patanjali Group’s holding in Ruchi Soya is expected to come down to about 81 per cent and the public would hold about 19 per cent.
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As per the DRHP, Ruchi Soya mentions it will utilise 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.
Ruchi Soya is a leading player in branded palm oil with a share of 12 per cent of the branded palm oil market in terms of value followed by Adani Wilmar with a share of 11 per cent. Ruchi Soya’s ‘Ruchi Gold’ brand is the market leader in branded palm oil and also the pioneer of soya foods in India under the brand name of “Nutrela’, which Ruchi Soya launched in 1980s. Its brands are well recognised in the Indian market and include Ruchi Gold, Mahakosh, Sunrich, Nutrela, Ruchi Star and Ruchi Sunlight.
The company has Patanjali biscuits, noodles and breakfast cereals business – which makes it the only Patanjali group entity which will sell the entire range of Patanjali biscuits, noodles and breakfast cereals under the brand of Patanjali itself. On the back of Patanjali group’s more than 14 years of experience in the nutraceutical and wellness space, Ruchi Soya has launched ‘Patanjali and Nutrela’ branded nutraceuticals.
Patanjali groups acquisition has enabled Ruchi Soya to benefit from Patanjali’s pan-India distribution network, significant technical know-how in the fast-moving consumer goods (FMCG) and fast-moving health goods (FMHG) sectors in India and group synergies amongst the wider Patanjali Group.
The company, with a crushing capacity of approximately 11,000 MT per day and Adani Wilmar with a crushing capacity of approximately 8,800 MT per day are the key players. The two players contribute almost 17-18 per cent of the total capacity of 40 Mn MT in India.