Ruchi Soya stock falls 6% on last day of FPO subscription

Shares of Ruchi Soya Industries tanked 10% to Rs 783.45 on the BSE in Monday’s intra-day trade ahead of the closing of its follow-on public offering (FPO) today.

The stock of the Patanjali Ayurved Group-controlled edible oils company has slipped over 14% in the last four trading days. It has corrected 31% from its lifetime high of Rs 1,139.95 touched on March 15, 2022. The shares closed 59.65 points or 5.96% down at Rs 815.05 on the S&P BSE Sensex.

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The Ruchi Soya FPO has been subscribed 2.47 times so far, garnering bids for 12.09 crore equity shares against the offer of 4.89 crore.

The retail portion, which is 35% of the issue, has been subscribed 0.79 times. The qualified institutional buyers (QIBs) and non-institutional investors portions were subscribed 1.53 times and 8.32 times, respectively.

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A meeting of the board of directors of the company is scheduled for March 29, 2022 for determining the issue price and the anchor investor issue price.

The FPO comprises a fresh issue of equity shares amounting to Rs 4,300 crore. The price band for the offer has been fixed at Rs 615-650 per share. The company had raised Rs 1,290 crore from anchor investors ahead of the FPO. The company said it finalised the allocation of more than 1.98 crore equity shares to 46 anchor investors.

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Patanjali had acquired Ruchi Soya in 2019 through an insolvency resolution process for Rs 4,350 crore. The FPO is to meet norms of a minimum public shareholding of 25% in a listed entity. At present, Patanjali promoters own a nearly 99% stake in Ruchi Soya. They need to dilute a minimum 9% stake in this FPO.

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The objectives for the fresh issue are repayment of Rs 2,664 crore of borrowings and funding of incremental working capital requirements of Rs 593 crore. The remaining amount will be used for general corporate purposes.