Ruchi Soya shares surged 20% to Rs 978 a share in intra-day trade on the BSE on Tuesday, but lost ground later when the company clarified that SMSes referring to investments in its follow-on public offering (FPO) had not been issued by the company or its promoters.

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The company’s shares were up 9% on the BSE at Rs 888 at 9:45 a.m., compared to a 0.47% advance in the benchmark S&P BSE Sensex. With this, the stock ended a four-day losing streak in which it had plummeted 11%. Meanwhile, the benchmark Sensex index has fallen 0.6% throughout the period.

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“We understand that there is an SMS/message in circulation on social media, speculating about investment opportunity in our company’s issue and about equity shares of our company being available at discount to the market price. We wish to bring to the attention of the investors that this message has not been issued by our company or any of our directors, promoters, promoter group or group companies. A first information report (FIR) bearing number 0188 dated March 27, 2022, has been logged by our company with a police station at Haridwar to take up investigation in respect of the message, under section 67A of the Information Technology Act, 2000 and section 420 of the Indian Penal Code, 1860,” Ruchi Soya said in a newspaper advertisement. 

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The advertisement comes after the Securities and Exchange Board of India (Sebi) advised Ruchi Soya Industries to allow investors in its Rs 4,300-crore follow-on public offering (FPO) to withdraw their bids owing to the “circulation of unsolicited SMSes advertising the issue.”

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Sebi stated in a letter to the three investment bankers handling Ruchi Soya’s share offering that the contents of the SMSs appear to be “misleading/fraudulent” and in violation of the ICDR (Issue of Capital and Disclosure Requirements) Regulations.

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Ruchi Soya, for its part, said in the ad that the deadline for bid withdrawals is Wednesday. The company also provided an estimated timeframe for listing the new shares issued in the FPO. According to the timeline, the new stock will go public “on or around” April 8.

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The FPO of the Patanjali-backed edible oil startup concluded on Monday, with 3.6 times subscription. The retail sector was 90% undersubscribed, while all other categories experienced considerable interest. Patanjali Ayurved, managed by Baba Ramdev, controls 98.9% of Ruchi Soya, with the public owning 1.1%.

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Ruchi Soya Industries Ltd reported a 3% increase in its net profit to Rs 234.07 crore for the quarter ended in December 2021. Its net profit stood at Rs 227.44 crore in the year-ago period. Total income rose by 41% to Rs 6,301.19 crore in the third quarter of this fiscal year from Rs 4,475.59 crore in the corresponding period of the previous year, according to a regulatory filing.