Market regulator Security and Exchange Board of India (SEBI) approved Patanjali-owned Ruchi Soya’s application to launch Rs. 4300 crore Follow-on Public Offer (FPO), sources told MoneyControl.
Ruchi Soya may launch the FPO next week. The company had filed draft documents in June to Rs, 4300 crores.
As reported by MoneyControl, 60 per cent of the FPO will be used mainly to pare Ruchi Soya’s debt, while 20 per cent will be used for working capital and another 20 per cent for general corporate use.
According to Securities Contract (Regulation) Rules, 1957, a listed entity should have a public shareholding of a minimum of 25 per cent. The FPO is launched to meet this requirement by SEBI.
Under this rule, promoters of the company are expected to dilute 9 per cent of their stake in the company. Patanjali holds a 98.90 per cent stake in the company.
According to MoneyControl, the company has time till December 2022 to dilute the promoter’s stake to 75 per cent.
Ruchi Soya is an edible oil company that was acquired by Patanjali through an insolvency process of Rs 4350 crores. Ruchi Soya primarily operates in the business of processing oilseeds, refining crude edible oil for use as cooking oil, as well as manufacturing soya products and value-added products.
The company has brands such as Ruchi Gold, Sunrich, and Nutrela under its name.
