Ruchi Soya Industries, the FMCG company backed by Baba Ramdev’s Patanjali Ayurved, has raised ₹1,290 crore from anchor investors ahead of its follow-on public offering (FPO). The issue, worth ₹4,300 crore is scheduled to open on March 24, Friday, and will close on March 28.
The company informed the stock exchanges on March 20 that the price band for its FPO has been set in the range of ₹615-650 per equity share. On Wednesday, it allocated 19,843,153 equity shares to anchor investors at the upper limit of this price-band, i.e. ₹650 per equity share, against the applications it received for the anchor investor portion of its issue.
Societe Generale, BNP Paribas, Ministry of Defence Pension Fund under The Sultanate of Oman, Abu Dhabi-based insurance company Yas Takaful PJSC, MK Cohesion, UPS Group and Alchemy are among the foreign investors that received allocation under the anchor investor portion of the FPO.
Domestic investors ASK Investments, Volrado Ventures, Kotak Mutual Fund, SBI Pension Fund, UTI Mutual Fund, Aditya Birla Sun Life Mutual Fund, Quant Mutual Fund, Winro Commercial, HDFC Life Insurance, SBI Life Insurance and Authum Investments are among the domestic investors who received equity shares under the anchor investor portion of the FPO.
Out of the total allocation of 19,843,153 equity shares to the anchor investors, 4,191,789 equity shares worth ₹272.47 crore were allocated to 24 mutual fund schemes, amounting to 21.1% of the total anchor book size.
Ruchi Soya will float the FPO exclusively as a fresh issuance of equity shares to public investors without any offer for sale component. This issue is meant to help Patanjali to achieve minimum public shareholding of 25% as mandated by Securities and Exchange Board of India (SEBI) for a listed business.
Currently, Patanjali Ayurved – the promoter of Ruchi Soya – holds 98.9% stake in the company, while public shareholders own the rest. After the FPO, Patanjali's shareholding in Ruchi Soya will come down to about 81% and the public would hold about 19%.
The FPO comprises equity shares of face value of ₹2 each aggregating to ₹4,300 crore. The FPO proceeds are proposed to be used for repaying the company’s lenders. Patanjali Ayurved aims to make its companies debt-free in the coming three-four years, with 62% of Ruchi Soya's proceeds from the ₹4,300 crore follow-on public offer to be used to partly retire the company's debt of ₹3,330 crore.
The rest of offer’s proceeds will be used for supplementing the working capital requirements of the company and other general corporate purposes, which will result in further improvement in financial performance
The Baba Ramdev-led homegrown FMCG giant completed the acquisition of Ruchi Soya in a ₹4,350-crore deal in December 2019. Since then, it has managed to grow the business to ₹16,318 crore in FY21.
The FPO will open for subscription to the public on Thursday, March 24, 2022 and shall close on Monday, March 28, 2022. The price band for the Offer has been determined at Rs 615 – Rs 650 per equity share. Investors can bid for a minimum of 21 equity shares and in multiples of 21 equity shares thereafter.
Axis Capital Limited, ICICI Securities Limited and SBI Capital Markets Limited are the book running lead managers (BRLMs) for the FPO.
The FPO is being made pursuant to regulations 103(1) and 129(1) of the SEBI ICDR Regulations, through the book building process, wherein not more than 50% of the offer shall be available for allocation to qualified institutional buyers (QIBs), not less than 15% of it shall be available for allocation to non-institutional investors and not less than 35% of the offer shall be available for allocation to retail individual investors.
