Ruchi Soya FPO: Ruchi Soya Industries Ltd which is backed by yoga guru Baba Ramdev is coming up with and Follow Public Offer (FPO). The issue of Rs. 4,300 crore will run from March 24 to March 28, 2022.
The price will range from Rs 615-650 a share. Keep reading to find out everything about the Ruchi Soya Industries Ltd FPO!
What is a Follow-on Public Offering (FPO)?
You must have heard about the Initial Public Offering (IPO), which is the fresh issue of shares of a newly listed company. Follow-on Public Offering (FPO) is a concept very similar.
It is the process of issuing new shares of an already listed company. FPO is also referred to as secondary offerings. This is also used as a means to diversify their equity base.
Generally, the purpose of an FPO is to either raise equity capital or reduce debt. Companies announcing secondary offerings witness a fall in the share price.
This is because the new shares are introduced at a price that is below the current market price.
The edible oil retail market is estimated to be approx. Rs. 1,79,500 Cr in FY 2020 and is expected to grow at a CAGR of 6% in the coming 5 years.
In addition to that, It is estimated that close to 75% of the total edible oil available in terms of volume is retailed as a branded product.
The global palm oil market is estimated to reach USD 116 billion in CY 2025 from USD 87 billion in CY 2020.
With Palm oil the most consumed edible oil contributing 42% to the total consumption of edible oil in India, the opportunity window is indeed large.
About the Company
Ruchi Soya is a part of the Indian conglomerate Patanjali Group.
It is one of India’s largest FMCG companies in the edible oil sector, and one of the largest fully integrated edible oil refining companies in the country, with a diversified presence in packaged foods and the FMHG (Fast Moving Health Goods) segment.
It is the largest manufacturer of soya foods with a presence across the entire value chain in upstream and downstream businesses with secured palm plantations.
The company has a Pan-India presence with 97 Sales Depots, 4,763 Distributors, and 4.58 Lakh Retail Outlets as of March 2021.
Financials of the Company
The FMCG company reported an increase of 25% in their revenue which stood at Rs 16,318.63 Cr in FY21. Of the total revenue, 2.51% is earned from exporting the products to different countries.
The net profit however declined by approximately 90% to Rs. 680.77 Cr in FY21 from Rs. 7,672.02 Cr in FY20.
The company had a promoter pledge of 99.97% in Dec 20 quarter which was reduced to 0% in Dec 2021.
Two prominent red flags for the company are the declining net cash flow position and the company’s link to ongoing regulatory cases.
|Market Cap (Cr):||26,924||ROE (%):||18.32|
|EPS (TTM) (₹):||30||Net Profit Margin:||4.17|
|Stock P/E (TTM):||30.38||Debt to Equity:||0.9|
|Dividend Yield (%):||0||Current Ratio||2.13|
Major Competitors of Ruchi Soya Industries Ltd.
|Company Name||Market Cap (Rs in Cr)|
|Adani Wilmar Ltd.||50,900.00|
|Ruchi Soya Industries Ltd.||29,715.75|
|Agro Tech Foods Ltd.||2,022.16|
|AVT Natural Products Ltd.||1,850.25|
|Manorama Industries Ltd.||1,411.19|
|BCL Industries Ltd.||1,116.33|
|Gokul Agro Resources Ltd.||985.77|
|Vegetable Products Ltd.||906.91|
|Vijay Solvex Ltd.||710.36|
|Ajanta Soya Ltd.||353.32|
|Gokul Refoils and Solvent Ltd.||350.94|
|Kriti Nutrients Ltd.||306.38|
|Modi Naturals Ltd.||253.06|
|Ruchi Infrastructure Ltd.||202.78|
|Evexia Lifecare Ltd.||200.97|
|Diligent Industries Ltd.||169.25|
|Sanwaria Consumer Ltd.||92.75|
|Natraj Proteins Ltd||44.89|
Strengths of the Company
- Strong brand recognition such as ‘Nutrela’.
- Pioneers in branded soya with 40% market share.
- Presence across mass, value and premium segments.
- Has integrated operations with strategically located manufacturing facilities.
- Experienced management & leadership.
Promoters Holding in Ruchi Soya Industries Ltd.
The Objective of the FPO
- Repaying outstanding loans/borrowings.
- Meeting incremental working capital requirements.
- Other general corporate purposes.
Share Price Movement
After the company announced its FPO price band, the share of the company dropped as much as 18% on Monday. Since then the stock has been trading at 900 levels.
In Thursday’s trading session, the shares closed at Rs. 915.40 per share.
Details of Ruchi Soya Industries Ltd. – FPO
|FPO Size||₹4,300.00 Cr|
|Opening Date||Mar 24, 2022|
|Closing Date||Mar 28, 2022|
|Face Value||₹2 per equity share|
|FPO Price||₹615 to ₹650 per equity share|
|Lot Size||21 Shares|
|Listing Date||Apr 6, 2022|
In this article, we covered the Ruchi Soya FPO Review 2022. The Follow on Public Offering opens from March 24th to March 28th, 2022.
For investors, it can be a good opportunity to look into the company and apply for the FPO after analyzing the details of the company. Happy Investing!
Are you applying for the FPO? Let us know in the comments below.