Patanjali owns 98.9% of Ruchi Soya. After the FPO, the public float rises to 19.18%. The company, which had to reach a 10% IPO within 18 months of taking over the edible oil producer through bankruptcy proceedings in December 2019, was penalized by the stock market for failing to meet the deadline. It is now required to raise 25% of the public float by the end of December, when it will be completed three years after the acquisition.
“We will shortly be announcing the details of how we will achieve the minimum public shareholding after the FPO,” Baba Ramdev, non-executive director of Ruchi Soya, told BloombergQuint on the sidelines of a press conference on Monday. However, he has not confirmed whether Patanjali will dilute its shares to reach the 25% float.
Ruchi Soya entered the food and nutraceutical segment by acquiring assets from parent company Patanjali last year. The segment, which has yet to acquire significant scale, will see further product additions. “We have agreed in principle to transfer the food and nutraceutical segment to Ruchi Soya,” Ramdev said.
Ruchi Soya will focus on four areas: edible oil, the food segment, the nutraceutical segment and reliance on domestic palm oil production through palm plantations set up across the country, he said.
According to Ramdev, the edible oil segment – which accounts for 85% of sales – will drop to 20-30% over the next few years, and food and nutraceuticals will become major sources of income for Ruchi Soya.
The company also aims to improve its Ebitda margin to double digits as food and nutraceuticals will improve sales, Asthana said.
Ruchi Soya had an Ebitda margin of 6.2% for the year ending March 2021 and 6.25% for the first half ending September.
The company will also look into drawing up a dividend policy in the next fiscal year. “Currently, as 98.8% is parent-owned, we have not considered this policy,” Asthana said.
The policy will be formulated once the FPO is completed, and “will be in line with best practice,” Ramdev said.
This post Ruchi Soya Raises Rs 4,300 Crore via FPO to Prepay Debt was original published at “https://www.bloombergquint.com/business/ruchi-soya-to-raise-rs-4300-crore-via-fpo-to-prepay-debt”