Winning Bizness Desk

Mumbai. Baba Ramdev's company Ruchi Soya is all set to open the Follow-on Public Offer (FPO) on March 24 for which the company has fixed the price band of Rs 615-650 per share. Its upper band is 35 per cent lower than its closing price on Thursday. Due to this, there was a huge fall in the shares of the company on Monday. It fell 17 per cent in early trade and closed at Rs 1004.45 in the previous session and opened at Rs 831 today.

However, the stock has given 4.13 per cent return so far this year and has gained 33.59 per cent in one month. The company's stock is trading above its 20-day and 50-day moving averages but lower than the five-day, 100-day and 200-day moving averages. The stock touched its 52-week high of Rs 1,377 on June 9, 2021, while it hit a low of Rs 619 on April 22, 2021.

FPO will open on March 24

The company's FPO will open on March 24 and close on March 28. It is planning to raise up to Rs 4,300 crore through this offer. Ruchi Soya is owned by Patanjali Ayurved, a company headed by Baba Ramdev. Edible oil maker Ruchi Soya got capital markets regulator SEBI's nod to bring in an FPO in August last year.

Patanjali owned Ruchi Soya in 2019

Patanjali had bought Ruchi Soya in 2019 through an insolvency process for Rs 4,350 crore. The promoters of the company currently hold about 99 per cent stake. The company has to sell at least nine per cent stake in this round of FPO. Ruchi Soya had filed the Draft Red Herring Prospectus (DRHP) in June 2021. According to the DRHP, Ruchi Soya will use the proceeds from the issue to pay off some outstanding debt, meet its working capital requirements and other general corporate purposes.

Why FPO is necessary

As per SEBI norms, there should be at least 25 per cent public stake in the company. Promoters have about three years to reduce their stake to 75 per cent. The promoters of the company currently hold 99 per cent stake in the company. The company is going to sell about 9 percent stake in this FPO.