Ruchi Soya’s follow on public offer (FPO) may be delayed. Presently the public shareholding of the company is only 1.1 per cent. According to SEBI rules, it is mandatory for a company to increase its shareholding to 10 per cent within 18 months of re-listing. However, this deadline ended in July last year. Yoga guru Baba Ramdev’s company Patanjali had acquired Ruchi Soya in 2019.
English business news website Mint has reported that Ruchi Soya may be late in the FPO. It has quoted sources as saying that the reason for the delay in the issue is weak demand for the shares of Ruchi Soya. The company had filed SEBI’s draft paper for FPOs in June last year.
Patanjali had acquired Ruchi Soya for Rs 4,350 crore under the bankruptcy process. The special thing is that the banks which gave loan to Ruchi Soya for this acquisition had already given loan to Ruchi Soya. About 99 per cent stake in Patanjali’s Ruchi Soya is pledged with banks.
Ruchi Soya has a plan to return the money to the banks from the money received through the FPO. But, there is also a delay in returning the money late in the FPO. Experts say that the public float of Ruchi Soya shares is very low. That’s why their valuations have been very high. Hence, it is difficult to find buyers for the sale of shares. At present, the valuation of Ruchi Soya is Rs 24,114 crore. The valuation was Rs 33,255 crore when the company had planned to launch an FPO.
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In September last year, a video of Baba Ramdev went viral. In this, during a yoga session, Baba Ramdev is seen asking his disciples to invest in Ruchi Soya shares. In the video, he had said that whoever has invested in the stock of Ruchi Soya, he will become a millionaire. This was in violation of SEBI rules. SEBI had sought an explanation from Patanjali in this regard.
“The delay in the FPO could be due to the market price of the company’s shares,” Srinivas Kotni, managing partner at law firm Lexport, told Mint. He said that it is necessary to follow the rule of public shareholding. If the FPO is delayed due to fraudulent or unfair trade practices, a maximum penalty of Rs 25 crore after adjudication can be levied under Section 15HA of the SEBI Act, 1922. SEBI also has the power to impose a penalty of up to Rs 1 crore under section 15HB. On Thursday, the shares of Ruchi Soya closed at Rs 812.95 with a slight fall.
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