New Delhi: Ruchi Soya’s Rs 4,300 crore follow-on public offer (FPO) opened for public participation on Thursday. A total of 35 per cent of the issue is reserved for retail investors and another 15 per cent for high net worth individuals. Analysts said the issue should sail through with ease and that investors may look to participate in it for long-term gains.
Ahead of the FPO, the company on Wednesday raised Rs 1,290 crore from anchor investors. The offer is entirely a fresh issue of shares.
At the higher end of the price band, Ruchi Soya is asking for a P/E multiple of 34.8 times based on H1FY22 annualised post-issue fully diluted EPS against an industry average of 65 times.
“It appears that the FPO would sail through. The anchor investment participation also encourages the Street. More importantly, such types of businesses are attracting more and more investors. You look at Adani Wilmar IPO listing and post that the rally has been sort of exclusive. Ruchi Soya itself is a market leader in terms of its brand Ruchi Gold. Besides, it is a key player in the soyabean market, soyabean mustard oil and all such stuff,” said Devang Mehta, Centrum Wealth Management.
Shares of Ruchi Soya have fallen 17 per cent in the last five sessions. Still, they are up 32 per cent in the last one year. Adani Wilmar, which got listed in February this year, has rallied 78 per cent over its issue price of Rs 230.
Mehta said while there is investor interest, there is also high inflationary pressure. “There is so much pressure on the interest rates and commodity prices are rising. But some companies would command the leadership position because they are market leaders in their own right,” he said.
Patanjali owns a 98.9 percent stake in Ruchi Soya and post the issue, its shareholding in the company will reduce to 81 percent. It needs to cut this further to 75 percent to comply with minimum shareholding norms.