Ruchi Soya FPO: 4300 Crore Issue To Open on 24 March

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Ruchi Soya Industries Limited (Ruchi Soya) has grown into a fully integrated company in the edible oil industry, with a presence from farm to fork and safe access to Indian palm oil plantations. Ruchi Soya is now one of India’s top FMCG companies, as a prominent maker and marketer of a healthy range of edible oils and a pioneer of soya foods. It’s also one of India’s biggest palm planting firms. Ruchi Soya now owns 22 production units, with a combined refining capacity of over 11000 tonnes per day, seed crushing capacity of 11000 tonnes per day, and packaging capacity of ten thousand tonnes per day. With a pan-India presence and strategically located manufacturing facilities that strike the right balance between proximity to raw materials and markets, as well as an extensive distribution network and a large sales force in India, the company has been able to run smoothly, increase production to meet ever-increasing domestic demand, and export by-products such as soya meal, lecithin, and other food ingredients to other countries. Ruchi soya has access to exclusive procurement rights to over two lakh hectares of land in India with a potential of palm oil cultivation.

Ruchi Soya, one of India’s oldest and most established edible oil companies, has been able to maintain its market leadership because to its great brand awareness. The company’s constant efforts have made Nutrela, Mahakosh, Sunrich, Ruchi Gold, and Ruchi No.1 renowned brands across the country. In order to consolidate and maintain its industry leadership, the Company has focused on continual expansion across all sectors. Ruchi Soya is devoted to renewable energy and is looking into possible business prospects in the field.

Ruchi Soya announced on Friday that its follow-on public offering, valued at Rs 4,300 crore, will begin on March 24 and end on March 28. According to an exchange filing, the company, which is supported by yoga guru Ramdev, will utilise the proceeds from the offering to develop its operations, repay some existing debts, meet incremental working capital requirements, and engage in general corporate activities.

The issuance also includes a resevation of 10,000 equity shares for eligible employees to subscribe to. In 2019, Patanjali, Ramdev’s consumer packaged goods company, paid Rs 4,350 crore for Ruchi Soya’s Nutrela brand. According to sources, the acquisition was completed through an insolvency and bankruptcy law process. Ruchi Soya is one of India’s largest companies in the soya food industry, having introduced the Nutrela brand in the 1980s. Patanjali purchased it after that. Ruchi Soya benefited from the ayurvedic company’s nationwide distribution network as well as its strong position in the fast-moving consumer goods market.

On January 27, 2020, Ruchi Soya shares were relisted at Rs 16.10 per share. On Friday, the stock finished at Rs 803.70, down from a 52-week high of Rs 1,378 on June 9, 2021. Ruchi Soya’s net profit increased by 3% to Rs 234.07 crore in the quarter that ended in December 2021. In the previous fiscal year, the company’s net profit was Rs 227.44 crore. In the third quarter of current fiscal year, total income increased by 41% to Rs 6,301.19 crore, compared to Rs 4,475.59 crore the previous year. Popular brands in Ruchi Soya’s portfolio include Ruchi Gold, Mahakosh, Sunrich, Nutrela, Ruchi Star, and Ruchi Sunlight.

For the uninitiated, an FPO is an offer in which a firm that is already listed on a stock market issues more shares on the stock exchange. This is done largely to raise additional funds and dilute current shares. Initial Public Offering is the full form of IPO. A firm is listed for the first time in an IPO. In FPO, on the other hand, a firm registers a greater number of its shares on the BSE, NSE, or both.

According to two persons with firsthand knowledge of the situation who requested anonymity, the Securities and Exchange Board of India (Sebi) has ordered Ruchi Soya to explain why the yoga instructor broke regulatory requirements. “The Sebi letter demanding an explanation, which was received on September 28,” one of the two sources claimed, “is for suspected violations of insider trading rules, fraud prevention, unfair trade practises, and investment adviser laws.” Ruchi Soya will use the full issue proceeds to enhance the company’s business by repaying some existing loans, fulfilling additional working capital requirements, and other general corporate reasons, according to the DRHP. Ruchi Soya principally engages in the processing of oilseeds, the refinement of crude edible oil for use as cooking oil, the production of soya products, and the development of value-added goods.

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