Edible oil firm Ruchi Soya, which is owned by Baba Ramdev-led Patanjali Ayurved, will hit the capital market with its follow-on public offer (FPO) on March 24 to raise up to Rs 4,300 crore. In a regulatory filing late on Friday, Ruchi Soya said a committee of the board has approved and adopted the red herring prospectus (RHP). It also approved the bid/ issue opening date of March 24, 2022, and closing date of March 28, 2022.
In August last year, the company had received capital markets regulator Sebi’s go-ahead to launch the FPO. It had filed the draft red herring prospectus (DRHP) in June 2021. The company is coming out with the public issue to meet Sebi’s norm of minimum public shareholding of 25 per cent in a listed entity.
As per the DRHP, Ruchi Soya 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. In 2019, Patanjali acquired Ruchi Soya, which is listed on the stock exchanges, through an insolvency process for Rs 4,350 crore.
The promoters currently have nearly 99 per cent stake. The company needs to dilute a minimum 9 per cent stake in this round of the FPO. As per Sebi rules, the company needs to bring down promoters’ stake to achieve the minimum public shareholding of 25 per cent. It has around 3 years to pare promoters’ stake to 75 per cent.
Ruchi Soya primarily operates in the business of processing oilseeds, refining crude edible oil for use as cooking oil, manufacturing soya products, and value-added products. The company has an integrated value chain in palm and soya segments, having a farm-to-fork business model. It has brands such as Mahakosh, Sunrich, Ruchi Gold and Nutrela.
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