Ruchi Soya, a subsidiary of Baba Ramdev-led Patanjali Ayurved, hit an upper circuit of 20 per cent on Monday. This was the first time during the last 6 months that the company earned such returns to the investors in a single day. The major reason behind the rise in the stock of Ruchi Soya was the approval of SEBI for the upcoming FPO of the company.
Ruchi Soya’s FPO Ruchi Soya, owned by Patanjali Ayurved, informed the exchange on Friday, March 11, 2022, that the upcoming Follow-on Public Offer (FPO) of Ruchi Soya has been approved by SEBI and the company’s FPO on March 24 is going to open, after which the shares of Ruchi Soya saw a rise.
Reasons for bringing FPO: According to the rules laid down by SEBI, promoters’ stake in any public listed company cannot exceed 75 per cent. On the other hand, more than 98 percent stake of Ruchi Soya is with Patanjali. For this reason the company is bringing its FPO in the market. After the FPO, the promoters’ company will reduce the stake to around 81 percent.
FPO to be Rs 4300 crore: The upcoming FPO of Ruchi Soya will be of Rs 4,300 crore. According to the draft paper submitted to Sebi, the capital from the FPO will be used by the company to repay debt, meet capital requirements and meet other corporate objectives.
Ruchi Soya gave a return of 4372 percent: Under the bankruptcy process, Ruchi Soya was bought in Patanjali in 2019 for Rs 4350 crore, after which the company was relisted in the stock market on 1 February 2020. The share price was Rs 21.55 on 1 February 2020 which has increased to Rs 963 on 14 March 2022. In this way, the stock has given a return of about Rs 4372 to the investors in the last two years. A year ago, on March 15, 2021, the share price was Rs 704, which increased to Rs 963 per share. During this time the stock gave a return of 36 per cent to the investors.