The FPO, which was priced at a range of Rs 615-650, was overall subscribed 12% during the day, with bids made for 56,30,709 shares against 4,89,46,260 on offer. The retail portion was subscribed 20%, whereas the portion set aside for employees was subscribed fully on Day 1.
Ruchi Soya’s Rs 4,300 crore follow-on public offering (FPO) saw a muted demand on Thursday as most of the bidding came from eligible employees and retail investors, whereas demand from institutional investors remained low.
The FPO, which was priced at a range of Rs 615-650, was overall subscribed 12% during the day, with bids made for 56,30,709 shares against 4,89,46,260 on offer. The retail portion was subscribed 20%, whereas the portion set aside for employees was subscribed fully on Day 1.
A day before the launch, the company had raised Rs 1,290 crore from 46 anchor investors, including foreign investors like Societe Generale, BNP Paribas, The sultanate of Oman – Ministry of defence Pension Fund. Kotak Mutual Fund, SBI Pension Fund, and UTI Mutual Fund were among the top domestic investors in the anchor book.
The company plans to utilise the funds for repayment of debt and meeting the working capital requirements of the company. Analysts are of a view that the offer price being at a steep discount from the market price, and its plans to reduce most of its debt through the proceeds will turn around positively for the company.
“Majority of the debt will be paid from the proceedings of the FPO while the remaining amount will help the company meeting its working capital requirements. At the upper price band of Rs 650/share, the FPO is available at 40% discount to the company’s current market price of Rs 910/share. The industry is valued at TTM PE of 31.5x and Ruchi Soya’s TTM PE multiple is 33.5x while the FPO is valued at a multiple of 21x,” said brokerage firm KR Choksey.
The company’s revenues grew at a CAGR of 10.8% over FY2018 to FY2021, while its revenues grew 24.4% year-on-year in FY21 to Rs 16,318.6 crore — which was mainly supported by synergies from acquisition with Patanjali, and further by various product launches.