NEW DELHI: Public bidding for Ruchi Soya Industries follow-on public offer (FPO) continued to see tepid response from investors on Friday saw a slow start on Thursday. Employee quota was oversubscribed but non-institutional and retail investors did not seem very enthusiastic.
As of 2.30 pm, the issue was subscribed close to 24 per cent, with total applications coming in for 1,19,79,975 shares against 4,89,46,260 on offer.
Patanjali owns 98.9 per cent stake in Ruchi Soya and, post the issue, its shareholding in the company will reduce to 81 per cent. It needs to cut this further to 75 per cent to comply with minimum shareholding norms.
Analysts are largely upbeat about the issue as the company is selling shares at a deep discount to the prevailing prices. Moreover, the company plans to use the fund to pay off debts, which will also strengthen its balance sheet.
“Considering Ruchi Soya’s strong brand recall, wide distribution, better financial track record and healthy ROE, we have a positive view for the FPO. It is recommended to “subscribe” the issue from the long term perspective,” said Ashika Stock Broking.
Astha Jain of Hem Securities said the FPO price band of Rs 615-650 per share suggests a PE multiple of 28 times on pre-issue FY21 EPS basis.
Ahead of the public bidding, the company raised Rs 1,290 crore from 46 anchor investors. Societe Generale, BNP Paribas, The Sultanate of Oman – Ministry of Defence Pension Fund, Yas Takaful PJSC, an Abu Dhabi-based insurance company, MK Cohesion, UPS Group, and Alchemy are among the foreign investors that received allocation under the anchor investor portion of the FPO.
About 21 per cent of the total anchor book size was allocated to 24 mutual fund schemes including Kotak, SBI, UTI, Aditya Birla Sun Life and Quant, among others.
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