Ruchi Soya plans to retire its ₹3,300 crore debt from follow-on public offer proceeds

Edible oil major Ruchi Soya Industries Ltd will use the proceeds from its ₹4,300-crore follow-on public offer (FPO) to retire debt of ₹3,300 crore, the company said on Monday.

The company has set a price band of ₹615-650 for the FPO, which will be launched on 24 March and close on 28 March. It received regulatory nod in August 2021.

The minimum bid lot was fixed at 21 equity shares and in multiples of 21 shares thereafter, while the floor price is 307.50 times of the face value of the equity shares.

The offer is part of its efforts to comply with the regulatory requirements of 25% minimum public shareholding for a listed company.

At present, Patanjali Ayurved Ltd has a 98.9% stake in the company, while the public shareholding is at just 1.1%. After the offer, Patanjali’s holding will be at 81% and public shareholding will go up to 19%.

In 2019, Patanjali acquired Ruchi Soya for ₹4,000 crore under the corporate insolvency resolution process. Besides repaying debt to the consortium of lenders, it will also use the proceeds to fund its working capital requirements, and for other general corporate purposes.

Ruchi Soya, which is a major player in the packaged consumer goods space, said on Monday that it will diversify its product portfolio.

“We aim to grow our nutraceuticals business, which was launched in June 2021, by diversifying our portfolio in that area in the near term, said Sanjeev Kumar Asthana, chief operating officer, Ruchi Soya. “As of December, the company has garnered more than ₹150 crore from this vertical. In the nutraceuticals space Ruchi Soya has a series of products which do not have any usage of either any non-vegetarian ingredients, or any genetically modified elements,” he added.

Furthermore, the company said it will segregate its food and non-food division, as a part of its restructuring plans, but did not divulge any further details.

Ruchi Soya is primarily engaged in the business of processing oil-seeds and refining crude oil for cooking. It is also the pioneer and largest manufacturer of soya foods under the brand name of Nutrela with a 40% market share. It produces oil meal, food products from soya, nutraceutical products, biscuits and value-added products from downstream and upstream processing. Ruchi Soya is engaged in trading in various products and generation of wind energy.

SBI Caps, Axis Capital and ICICI Securities are the book-running lead managers to the issue.