Patanjali Ayurved-owned Ruchi Soya, whose ₹4,300 crore follow-on public offer (FPO) hit the capital markets on Thursday, aims to be a debt-free company by April through paying its debt of about ₹3,300 crore, Baba Ramdev said.
Speaking at a press conference, Mr. Ramdev, non-executive director on the board of Ruchi Soya, stressed that the aim was to make the Patanjali and Ruchi Soya combine the biggest food and FMCG company of the country within the next five years.
For the Ruchi Soya FPO, the price band has been set at ₹615-₹650 per equity share . The issue closes on March 28. Investors can bid for a minimum of 21 equity shares and in multiples of 21 shares thereafter. The company on Thursday added that it had garnered ₹1,290 crore from anchor investors by alloting 1,98,43,153 equity shares at the upper-end of the price band.
Noting that the company had unveiled its FPO despite volatility in the stock market because of the war between Russia and Ukraine, Mr. Ramdev expressed confidence that the FPO would be a success as ‘people have faith in its products and brand’.
“The proceeds of the FPO would be utilised to retire the term loan of ₹3,300 crore. Ruchi Soya will become debt-free in April," he said.
Ruchi Soya shares fell 2.75% to ₹872.75 apiece on the BSE. Currently, Patanjali Group owns about 98.9% stake in Ruchi Soya, and post the FPO, its holding will come down to about 81%.
“We are running the company with transparency, accountability and corporate governance.," Mr Ramdev said.
Patanjali had acquired Ruchi Soya in 2019 through an insolvency process for ₹4,350 crore.
Asked about synergy between the two companies, he replied, “We are making sure there is no overlap in the different businesses of the group...There is now a non-compete agreement between the group firms."
He added that over the next few months, Patanjali Ayurved would transfer its food business to Ruchi Soya, and will operate in the non-food, traditional medicine and wellness space. Last year, Patanjali had transferred its biscuits business to Ruchi Soya for ₹60 crore.
The acquisition of Ruchi Soya by Patanjali was surrounded in controversy with opposition parties alleging that Ruchi Soya had taken loans of ₹12,146 crore and when it filed for bankruptcy, the banks, including SBI, could recover only 43.6% of the loans given. However, they pointed out, when Patanjali decided to take over the defunct company, public sector banks had agreed to offer loans worth ₹3,250 crore to fund the acquisition.
