Patanjali-backed Ruchi Soya logs a stellar uptick in its stock price on Monday's early session after the company filed a red herring prospectus (RHP) for its follow-on public offer (FPO) to the tune of ₹4,300 crore upon receiving board of directors approval.
At around 09.53 am, Ruchi Soya stock was trading at Rs949 apiece, skyrocketing by Rs145.30 or 18.08% on BSE. The stock was near the day's high of Rs950 apiece. The upward trend in the stock is expected to continue today.
Ruchi Soya will offer equity shares with a face value of Rs2 each amounting to ₹4,300 crore under the FPO. The issue will also include a reservation of about 10,000 equity shares to eligible employees for a subscription.
The issue will open on March 24 and will be available for bidding till March 28, 2022.
SBI Capital Markets, Axis Capital, and ICICI Securities are the book-running lead managers for the issue.
Ruchi Soya plans to utilize net proceeds for repayment of certain borrowings, incremental working capital requirements, and general corporate purposes.
Through the FPO, promoters of the company seek to reduce their shareholding to comply with Sebi's guidance. Currently, under the Sebi direction, the minimum requirement for a public shareholding in a listed company should be 25%. That said, the FPO will support Swami Ramdev's Patanjali to adhere to the minimum shareholding rules.
At present, Patanjali owns 98.9% in Ruchi Soya while public shareholders own 1.1%. Post the FPO, Patanjali's shareholding in the edible oil manufacturer will reduce to 81% while public shareholding will rise to 19%.
An FPO is similar to an initial public offering (IPO). A listed company opts for FPO to issue additional shares to the public after their IPO. Just like the initial public offer, FPO also enables listed companies to raise additional capital and reduce promoters' shareholding.
