Edible oil firm Ruchi Soya, which is owned by Baba Ramdev-led Patanjali Ayurveda, has filed draft document with SEBI to launch a follow-on public offer (FPO) for raising up to Rs 4,300 crore.
The FPO is being launched to meet the SEBI norm of minimum public shareholding of 25 per cent in a listed entity. Ruchi Soya filed the draft red herring prospectus (DRHP) with market regulator SEBI on Saturday, sources said, adding that the company plans to raise up to Rs 4,300 crore through the share sale. They said that the promoters have to dilute a minimum 9 per cent stake in this round of the FPO.
The FPO is likely to hit the capital market next month after getting Sebi approval. In a regulatory filing, Ruchi Soya said that the issue committee constituted and authorised by its board has approved raising of funds by way of further public offer of equity shares of the company. The panel also approved the DRHP dated June 12, 2021, for filing with SEBI and two stock exchanges -- BSE Limited and National Stock Exchange of India Limited. Promoters group held 98.90 per cent stake in the company.
As per the SEBI listing rules, the company needs to bring down promoters' stake to achieve the minimum public shareholding of 25 per cent in compliance with the listing requirement under the Securities Contract (Regulation) Rules, 1957. Ruchi Soya has three years to pare promoters' stake to 75 per cent. The share price of Ruchi Soya closed at Rs 1,242.35 apiece on the BSE on Friday.
The market capitalization of the company currently stands at nearly Rs 36,800 crore. In 2019, Patanjali acquired Ruchi Soya, which is listed on stock exchanges, through an insolvency process for Rs 4,350 crore. Ruchi Soya primarily operates in the business of processing of oilseeds, refining of crude edible oil for use as cooking oil, manufacturing of 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.
Last month on May 11, Ruchi Soya had announced the acquisition of biscuits business from Patanjali Natural Biscuits Pvt Ltd (PNBPL) in a slump sale at Rs 60.02 crore. The objective of the acquisition is to expand the product portfolio of the existing business of the company, it had said.