Exit route available to retail investors in Ruchi Soya FPO between March 28-30

On March 28, bidding for Follow-on Public Offering (FPO) was closed in an exceptional situation as a retail bidder can now withdraw latest by Wednesday, March 30, as directed by SEBI.

Such an unprecedented move by SEBI was triggered by the instances of unsolicited messages being sent to Patanjali users to invest in the said offer luring the users to grab “good investment opportunity”, claiming the offer price to be at a discount of 30% to the market price.

The company in its exchange filing yesterday evening had categorically denied having issued such messages/SMS doing rounds in social media. The company has filed a first information report (FIR) to investigate the origin of the messages doing the rounds on social media. It has also issued newspapers advertisement to that effect.

To safeguard the interest of the vulnerable retail investors, SEBI’s diktat directs the company to allow exit route for bidders till March 30.

Ruchi Soya’s FPO commenced on March 24 and ended yesterday. The rationale for the FPO was the intention of the company to unleveraged its Balance Sheet (debt-free) while complying with SEBI’s requirement of attaining a minimum public shareholding of 10%.

The follow-on offer has managed to garner 3.6 times subscription. While it saw strong demand in most other categories, it was undersubscribed in the retail category at 90%.

The company has also provided a tentative date of listing of the new "on or about" April 8.

For the uninitiated, Ruchi Soya, a FMCG player incorporated in 1986 was acquired by Patanjali Ayurved for Rs 4,350 crore in 2020 through a corporate insolvency resolution process. It is India's largest FMCG company in the edible oil sector, and one of the largest fully integrated edible oil refining companies in the country with Patanjali Ayurved holding a 98.9% stake in the company.

Following the FPO, Patanjali’s shareholding is expected to reduce to 81%, while public shareholding will rise to 19%.

Shares of Ruchi Soya tumbled 6.1% on Monday and closed at Rs 815.05 apiece. At 12:15 pm, on Tuesday shares of Ruchi Soya are trading up by 7.98% at Rs 879.30 recouping yesterday’s losses.

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