Patanjali-backed Ruchi Soya Industries rallied 13 percent after its follow-on offer shares listed on the bourses on April 8 as the company claimed that it is debt free with FPO money.
The stock opened at Rs 850 on the BSE, up 3.8 percent against the previous close. It gained momentum in afternoon trade and closed with 13 percent gains at Rs 925. If the gain is compared with FPO issue price of Rs 650, the rally stands at 42 percent.
The stock had corrected 25 percent from the closing of March 15 till previous session, and even during the FPO subscription period, it had seen 9 percent odd correction.
Ruchi Soya recorded a market capitalisation of nearly Rs 33,500 crore at Friday's close.
The company has raised Rs 4,300 crore through its FPO including Rs 1,290 crore raised from anchor investors, which as per RHP would be utilised for repaying of debts (Rs 2,663.8 crore) and incremental working capital requirements (Rs 593.42 crore).
"The board has decided to clear entire bank borrowings of the company thereby making it a debt free company as on date. It covers term loan from banks, working capital borrowing, bank guarantees and letter of credits," said Sanjeev Asthana, CEO of Ruchi Soya in a release.
As per the financials of six months ended September 2021, it had long term borrowings of Rs 2,783.64 crore and short term borrowings (non-current liabilities) of Rs 858.33 crore, which was reduced from Rs 7,800 crore in FY19.
Ruchi Soya Industries was acquired by Patanjali via IBC proceedings. With the FPO, the promoters' shareholding in the company stands reduced to 80.8 percent, from 98.9 percent earlier.
The rest of shareholding around 6 odd percent will be sold by the company by December to meet minimum public shareholding norms. "To dilute the rest 6 percent stake, we will have time till December 2022. We will meet the target to increase 25 percent public shareholding in the company within a time," said Baba Ramdev, Non-Executive Director at Ruchi Soya Industries in an interview to CNBC-TV18.
The reason behind FPO launch was that the listed company has to have 25 percent public shareholding as per the Sebi guidance.
Ruchi Soya Industries, one of the largest FMCG companies in the Indian edible oil sector and one of the largest fully integrated edible oil refining companies in India, reported profit of Rs 337.8 crore on revenue of Rs 11,261.2 crore for six months period ended September 2021.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
