Follow-on offering (FPO) shares of Patanjali-backed Ruchi Soya Industries were listed on April 8, following which the company’s shares jumped 13 per cent. The company had raised this fund through FPO to repay the debt. Now the company is claiming that Ruchi Soya will become debt free with the FPO money.
On the BSE, the stock opened at Rs 850, up 3.8 percent against the previous closing price. It gained momentum in afternoon trade and closed at Rs 925 with a gain of 13 per cent. If the profit is compared with the FPO issue price of Rs 650, it is 42 percent higher.
From the close of March 15 till the last session, the stock had lost 25 per cent. It also saw an improvement of 9 per cent during the FPO subscription period. As of Friday’s closing price, the market cap of Ruchi Soya is Rs 33,500 crore.
The company raised Rs 4,300 crore through FPO
The company has raised Rs 4,300 crore through its FPO, which includes Rs 1,290 crore raised from anchor investors. According to RHP, this fund will be used to repay debt (Rs 2,663.8 crore) and increase working capital (Rs 593.42 crore).
Ruchi Soya CEO Sanjeev Asthana said, “The board has decided to repay the entire bank loan of the company, making it a debt-free company. This includes term loans, working capital loans, bank guarantees and letters of credit from banks. Are included.”
As of the six-month financial period ended September 2021, it had long-term borrowings (non-current liabilities) of Rs 2,783.64 crore and short-term borrowings (non-current liabilities) of Rs 858.33 crore, which declined from Rs 7,800 crore in FY19.
Ruchi Soya FPO Listed With Strong Premium, Now What Investors Should Do, Sell, Hold Or Buy?
Ruchi Soya Industries was acquired by Patanjali through IBC. With the FPO, the promoters’ stake in the company has come down from 98.9 per cent to 80.8 per cent.
The remaining around 6 per cent stake will be sold by the company by December to meet the minimum public shareholding norms. The reason behind launching the FPO was that the listed company should have a 25 per cent public stake, as per SEBI.