Ruchi Soya shares hit 20% upper circuit on Rs 4300-crore FPO's confirmation

Shares of Ruchi Soya Industries were locked in 20% upper circuit in Monday's intraday trade on the BSE after the FMCG company announced to launch follow-on public offer (FPO) starting March 24. The offer will close on March 28, 2022. The company aims to raise Rs 4300 crore through this FPO.  

Earlier, Edible oil major Ruchi Soya's board had approved the red-herring prospectus (RHP) for the FPO, the company had confirmed in a regulatory filing on Friday.  

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The issue comprises a reservation of up to 10,000 equity shares for subscription by eligible employees. Currently, Patanjali Group owns about 98.9% stake in Ruchi Soya. Post the FPO, Patanjali Group's holding in Ruchi Soya will come down to about 81% and the public would hold about 19%.  

As per Sebi rules, the company needs to bring down promoters' stake to 75% to meet mandatory minimum public shareholding of 25 per cent for a listing entity. It has around 3 years to dilute promoters' stake to 75 per cent. 

The company primarily operates in the business of processing oilseeds, refining crude edible oil for use as cooking oil, manufacturing soya products, and value-added products. 

Baba Ramdev-led Patanjali Ayurved had acquired Ruchi Soya through an insolvency process for Rs 4,350 crore. 

At 11 am, shares of Ruchi Soya were locked in 20% upper circuit and gained Rs 161.70 to Rs 964.40 per share on the BSE.  

Ruchi soya stock has gained over 30% in one year, however, the shares yielded over 900% return in 2 years and whooping 3200% in years, showed technical data of Ruchi Soya.  

A follow-on offering is the issuance of additional shares made by a company after an initial public offering.