Patanjali Ayurved’s Ruchi Soya led by yoga teacher Ramdev on Thursday hit the capital market to raise Rs 4,300 crore through a follow -up public offering (FPO) as it aims to be a debt -free company.
This issue closes on March 28th. The price band has been set at Rs 615 to Rs 650 per share.
Speaking at a press conference here, Ramdev said the company had launched its FPO despite fluctuations in the stock market due to the war between Russia and Ukraine.
He said the company had raised Rs 1,290 crore from major investors on Wednesday and expressed confidence that its FPO would be a huge success as people trusted its products and brand.
Ramdev said the proceeds from the FPO would be used to terminate the Rs 3,300 crore term loan.
“Ruchi Soya will be debt free,” he said.
Asked why the price band was kept lower than the current market price, Ramdev said this was done to give good returns to investors.
Ruchi Soya shares closed on Wednesday at Rs 897.45 each on the BSE.
“We have recovered Ruchi Soya after acquiring it through insolvency proceedings,” Ramdev said.
He said the company went bankrupt due to mistakes made by previous management.
“We run the company with transparency, accountability and corporate governance,” he said.
Currently, Patanjali Group owns approximately 98.9 per cent stake in Ruchi Soya.
Public shareholders own about 1.1 percent stake.
After the FPO, the Patanjali Group’s stake in Ruchi Soya will drop to about 81 percent, and the public will hold about 19 percent.
The Securities and Exchange Board of India (SEBI) has given its approval for the launch of Ruchi Soya FPO in August 2021, after the company filed a draft red herring prospectus (DRHP) in June 2021.
The firm issues public issues to meet SEBI’s minimum public shareholding norm of 25 per cent in listed entities. It has about three years to reduce the organizer’s stake to 75 percent.
Ruchi Soya will use the proceeds from the issuance to advance the company’s business by repaying certain outstanding loans, meeting additional working capital requirements and other general corporate purposes.
In 2019, Patanjali acquired Ruchi Soya, which is listed on the stock exchange, through an insolvency process of Rs 4,350 crore.
Ruchi Soya operates primarily in the business of processing oilseeds, refining crude edible oils for use as cooking oil, producing soy products and value -added products. The company has an integrated value chain in the palm oil and soybean segments, which has a farm -to -fork business model.
It has brands like Mahakosh, Sunrich, Ruchi Gold and Nutrela.