,The Baba Ramdev owned Ruchi Soya Industries, a part of the Patanjali Group of companies, received the green light from The Securities and Exchange Board of India (SEBI). The Indian edible oils company got its follow-on public offer (FPO) approved for Rs 4,300 crore according to MoneyControl. With that, the company might go ahead with the launch of the FPO sometime next week most likely. Ruchi Soya had filed the draft document with the regulatory body in June. The FPO is being launched to meet SEBI’s minimum public shareholding norm of 25 per cent in a listed entity, under the Securities Contract (Regulation) Rules, 1957.
As a result of this rule, the promoters of the FPO have to dilute a minimal 9 per cent stake in this round. The promoter group itself holds a 98.90 per cent stake in the company. So, to keep in line with the norms of SEBI’s guidelines, the company needs to lower the promoter’s stake to achieve that benchmark of 25 per cent minimum public shareholdings. The company has been given a deadline of December 2022 to dilute its stake to 75 per cent.
The FPO is a book built one with a face value of Rs 2 per equity share. The object of the issue is for the company to use the proceeds of the offer for the repayments and pre-payments of the company’s borrowings either in full or partially. The rest of the proceeds are intended for the funding of capital requirements as well as other general corporate purposes. It is likely that around 60 per cent of the FPO will be used to pare the company’s debts. The other 40 per cent will be divided into 20 per cent divisions to fund the other objectives as per a report by MoneyControl.
The promoters for the company in this offer are, Acharya Balkrishna, Ram Bharat, Snehlata Bharat, Patanjali Ayurved Limited, Patanjali Parivahan Private Limited, Divya Yog Mandir Trust, Patanjali Gramudyog Nayas, Ruchi Soya Industries Limited Beneficiary Trust, Yogakshem Sansthan, Vedic Broadcasting Limited, Patanjali Peya Private Limited, Patanjali Natural Biscuits Private Ltd, Divya Packmaf Private Ltd, Vedic Ayurmed Pvt Ltd, Sanskar Info TV Pvt Ltd, Patanjali Agro India Pvt Ltd, SS Vitran Healthcare Pvt Ltd, Patanjali Paridhan Pvt Ltd, Gangotri Ayurveda Limited, Swasth Aahar Pvt Ltd, and Patanjali Renewable Energy Pvt Ltd.
Ruchi Soya was incorporated in 1986 and to this day stands as one of the leading FMCG brands in India with regards to the edible oil segment. It is also one of the largest domestic manufacturers of soya foods. It also boasts a strong presence up and down the value chain with its palm plantations.
The company was acquired by Patanjali Ayurveda in 2019 through the process of insolvency for Rs 4350 crore. Ruchi Soya primarily operates in the palm and soya segments with a farm-to-fork business model. The company has different verticals such as edible oils and by-products, oleochemicals, textured soya protein (TSP), honey and atta, oil palm plantation, biscuits, cookies, and rusks, noodles and breakfast cereals, nutraceuticals and wellness, and renewable energy wind power.
Currently, the company has oversight of brands such as ‘Neutrela’ with a range of premium products like ‘Neutrela High Protein Chakki Aata’ and ‘Neutrela Honey’. It also has brands such as Mahakosh, Sunrich and Ruchi Gold under its banner.
The company has some factors that give it a competitive market edge. One such factor is that it is part of Baba Ramdev’s FMCG group, Patanjali. It also has a well-connected network as it has a distribution of 100 sale depots, 4763 distributors, and 457,788 retail outlets.