Ruchi Soya, the edible oil brand owned by Baba Ramdev’s Patanjali Ayurved will launch a follow-on public offer (FPO) next year. According to Baba Ramdev, the FPO will be launched by the company to bring down promoters’ shareholding in the company.
Ruchi Soya, which is listed on the stock exchanges with an insolvency process for ₹ 4,350 crores, was acquired by Patanjali last year. The promoters hold 99 percent of the company and they need to pare their stakes to meet a minimum 25% public shareholding norm.
Baba Ramdev told PTI, “We are going to come with the FPO next year in which we would dilute our shareholding.” A board resolution has been passed in this regard. However, he did not share the price of the said FPO.
Mint reported comments of a company official who said that promoters have to dilute 10% shareholding by June 2021 and 25% in 36 months as per the Sebi regulations.
Baba Ramdev, while commenting on Ruchi Soya also said that the company will grow. Ruchi Soya markets its products under different names like Nutrela.
The resolution plan which got approved by the National Company Law Tribunal (NCLT), the promoters, and the promoter group presently hold a 98.90 percent stake in Ruchi Soya and the balance 1.10 percent is the public shareholding. However, SEBI listing rules claim that the company has to increase its public shareholding so that it can achieve the minimum public shareholding norm in compliance with the listing requirement under the Securities Contract (Regulation) Rules, 1957.
Ruchi Soya earlier reported an increase in revenue for the July-September quarter at ₹ 3,990.72 crores. The company’s data also showed that its net profit went up by 54.88 percent to ₹ 126.73 crores.
Baba Ramdev also said, “We have operated Ruchi Soya well. People were raising doubts about us saying that we have experienced only in running FMCG business and not a commodity business.”
He added, “We will have a higher growth and turnover this fiscal.”
The company mainly deals in the business of processing of oilseeds. The company is one of the latest manufacturers of edible oil in India. A report published by Deloitte Touche Tohmatsu (Deloitte) says that the company is ranked at 175 in the top 250 consumer products companies, in the “Global Powers of the Consumer Products Industry 2012”. The company was founded in 1985 and has its headquarters in Indore.
A consortium of Patanjali Ayurved, Divya Yog Mandir Trust (through its business undertaking Divya Pharmacy), Patanjali Privahan, and Patanjali Gramudhyog Nyas won the bid to acquire Ruchi Soya in 2019.
According to data provided by business intelligence platform Tofler, Patanjali Ayurved also earlier reported an increase of 21.56% in standalone net profit to ₹424.72 crores for 2019-20. Revenue went up by 5.86 percent to ₹ 9,022.71 crores.