Ruchi Soya Industries, the edible oil maker, has fixed a price band of Rs 615-650 per share for its follow-on-public offering (FPO) that seeks to raise Rs 4,300 crore. The higher end of the price band represents a discount of 35 per cent to its closing price on the BSE last Thursday.
At Rs 1,004.45 a share, the company had a market capitalisation of nearly Rs 29,716 crore.
In a regulatory filing on Sunday, the firm backed by Patanjali Ayurved Ltd (PAL), said the minimum lot for the float will be 21 shares and in multiples thereafter. The promoters hold 98.90 per cent of the company. The follow-on-offer is meant to comply with Securities and Exchange Board of India (Sebi) rules that require listed firms to have a minimum public holding of 25 per cent.
Yoga guru Baba Ramdev- led Patanjali acquired Ruchi Soya in 2019 through an insolvency process for Rs 4,350 crore.
In its draft red herring prospectus (DRHP), Ruchi Soya said the proceeds would be utilised towards the repayment of certain outstanding loans, funding incremental working capital requirements and general corporate purposes.
As per DRHP, as on December 31, 2021, the company’s total outstanding borrowings stood at Rs 3,885.45 crore. It proposes to utilise an estimated Rs 2,663.83 crore from the proceeds towards the prepayment of borrowings made from a consortium of lenders and PAL, one of its promoters, in full or part.
The company, known for brands such as Nutrela, is the largest player in branded palm oil with a 12 per cent share, according to the prospectus. Apart from edible oil, it has a presence across other products that include hydrogenated fats (vanaspati) and bakery fats, by-products and derivatives of edible oil.
The brands include Mahakosh, Ruchi Gold, Ruchi Star, Sunrich, Soyumm and Tulsi.
Leveraging the Nutrela brand, it ventured into branded wheat flour and honey by launching Nutrela High Protein Chakki Atta and Nutrela Honey, respectively, in 2020-21. According to a report by Technopak, the branded wheat flour industry has a 15 per cent market share which is expected to rise up to 23 per cent in 2024-25.
It also forayed into biscuits, cookies, rusk and other associated bakery products category in May 2021 by acquiring it from Patanjali Natural Biscuits Pvt Ltd pursuant to a business transfer agreement for a lumpsum consideration of Rs 60.02 crore and recently diversified into nutraceutical and wellness product space.
