Ruchi Soya, owned by Patanjali Ayurved, whose follow-up public offering (FPO) of 4,300 crore hit the capital markets on Thursday, is aiming to be a debt-free company by April by paying down its debt of about 3,300 crore, said Baba Ramdev.
At a press conference, Mr. Ramdev, non-executive director on the board of Ruchi Soya, emphasized that the goal is to combine Patanjali and Ruchi Soya into the largest food and FMCG company in the country within the next five years.
For the Ruchi Soya FPO, the price range has been set at ₹615 to ₹650 per share. The issue ends on March 28th. Investors can bid for a minimum of 21 shares and thereafter for multiples of 21 shares. The company added on Thursday that it had raised £1,290m from anchor investors by allocating 188.8.131.52 shares at the top end of the price range.
Noting that the company unveiled its FPO despite volatility in stock markets due to the war between Russia and Ukraine, Mr. Ramdev expressed confidence that the FPO would be a success as “people have confidence in its products and its… have a brand”.
“FPO proceeds would be used to repay the ₹3,300 crore term loan. Ruchi Soya will be debt free in April,” he said.
Ruchi Soya shares fell 2.75% on the BSE to ₹872.75 a share. Currently, Patanjali Group owns approximately 98.9% of Ruchi Soya, and after the FPO, its stake will decrease to approximately 81%.
“We run the company with transparency, accountability and corporate governance,” said Mr. Ramdev.
Patanjali had acquired Ruchi Soya in 2019 as part of bankruptcy proceedings for 4,350 crore.
When asked about synergies between the two companies, he replied, “We make sure there is no overlap in the different businesses of the group… There is now a non-compete between the companies in the group.”
He added that Patanjali Ayurved will be transferring its grocery business to Ruchi Soya in the coming months and will be active in non-food, traditional medicine and wellness businesses. Last year Patanjali transferred his biscuit business to Ruchi Soya for ₹60 crore.
Patanjali’s takeover of Ruchi Soya was the subject of controversy by opposition parties, who claimed that Ruchi Soya had borrowed ₹12,146 crore and when the company filed for bankruptcy, the banks, including SBI, could only manage 43.6% of the loans made get back. However, they pointed out that public sector banks had agreed to offer loans of ₹3,250 crore when Patanjali decided to take over the defunct company to fund the takeover.