Ruchi Soya FPO Analysis & Details

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Ruchi Soya Industries was established in 1986. Currently, the company is a part of Patanjali Group. It is one of the main FMCG brands in the Indian consumable and edible oil segment. Ruchi Soya is the biggest maker of soya food varieties with a presence across the whole worth chain. The company has got its palm ranches. In this article, we take a closer look at the Ruchi Soya FPO Review and its possible future prospects.

The firm works in various verticals. It includes Edible oil and other co-products. It also operates in Oleochemicals, Textured Soya protein (TSP), Oil Palm Plantation, Honey, Biscuits, Atta, Cookies, Nutraceuticals, Rusks, Breakfast oats, Noodles and wellbeing. The company is also coming up with some new projects on Renewable energy wind power with an alliance through Patanjali Group. Their product range of edible oil includes Neutrela Oil, Mahakosh Oil, Neutrela Soya Foods, Sun-rich Oil, Ruchi Gold Oil, Neutrela New Products, Ruchi Star Soyabean Oil, Vanaspati, and Bakery Fats.

Right now, it is utilizing its core product “Neutrela” with a scope of premium items like “Neutrela High Protein Chakki Aata” and “Neutrela Honey”. Until June 2021, Ruchi Soya claims 22 assembling units with an all-out refining limit of 11000 tons each day. It has a seed crushing capacity of 11000 tons per day and a packaging capacity of 10000 tons per day. Out of all 22, 16 plants are functional currently. It has a solid distribution network service of 100 deal stations, 4763 merchants and 457788 retail outlets.

OBJECTS OF THE FPO ISSUE:

  • Prepayment of all the loans of the company. It will be availed on a consolidated basis. 
  • To meet corporate targets. 
  • To fund the working capital requirement.

RUCHI SOYA FPO DETAILS:

Ruchi Soya Industries Ltd, a company owned by Ramdev’s Patanjali Ayurveda, has gotten SEBI’s approval to float their FPO in the market. The FPO will be carried out to pare the obligation and satisfy the shareholding pattern per the SEBI’s guidelines.

Patanjali had procured the past bankrupt firm known for the Neutrela brand of items in 2019 for around ₹4,350 crores through an IBC measure in NCLT. Ruchi Soya’s stock relisted on 27 January 2020 on NSE and BSE at ₹16.10 and took off to a one-year high of ₹1,535 on 29 June 2020. It was on account of the shareholding pattern as Patanjali Group owned the majority stake. Only a significant amount was available in public float.

The FPO will help the firm increment the public shareholding and public float. Ruchi Soya will dilute its existing shareholding pattern to satisfy a minimum of 25% public holding through the FPO. To meet the MPS prerequisite, the organization needs to expand public shareholding by simply 9% to meet the MPS prerequisite, and the left 15% needs to be finished by December 2022.

FPO Opening DateMarch 24, 2022
Issue TypeBook Building Issue FPO
FPO PriceRs. 615- Rs.650 per equity share
Face ValueRs. 2/equity share
Listing AtBSE, NSE
FPO SizeApprox. Rs.4300 Crores 
Market Lot1 lot of 21 shares
Minimum Order Quantity21 Equity shares
Minimum Order PriceRs. 13,650
Maximum Order Quantity294 equity shares
Maximum Order PriceRs. 191,100
 Price Band Announcement:March 21, 2022
 Anchor Investors Allotment:March 23, 2022
 FPO Close Date:March 28, 2022
 Basis of Allotment:March 31, 2022   Qualified Institutional Investors = 50% Retail Investors = 35% Non-Retail Investors = 15%  
 Refunds:April 04, 2022
 Credit to Demat Account:April 05, 2022
 FPO Listing Date:April 06, 2022

PROMOTERS OF THE RUCHI SOYA COMPANY:

Many groups jointly own Ruchi Soya. These include Patanjali Ayurveda Limited, Patanjali Parivahan Private Limited, Divya Yoga Mandir Trust, Patanjali Gramudyog Nayas, Ruchi Soya Industries Limited Beneficiary Trust, Vedic Broadcasting Limited, Patanjali Peya Private Limited, Patanjali Natural Biscuits Private Ltd, Divya Packmaf Private Ltd, Vedic Ayurmed Pvt Ltd, Sanskar Info TV Pvt Ltd, Patanjali Agro India Pvt Ltd, SS Vitran Healthcare Pvt Ltd, Patanjali Paridhan Pvt Ltd, Gangotri Ayurveda Limited, Swasth Aahar Pvt Ltd, and Patanjali Renewable Energy Pvt Ltd.

The individual promoters of the company are Acharya Balkrishna, Ram Bharat, Snehlata Bharat.

STRENGTHS AND GROWTH ASPECTS OF RUCHI SOYA FPO:

  • The fortifying industry with another solid increment in the product portfolio. The company is continuously looking forward to diversifying its product portfolio.
  • The company have set up their fundamentals in the renewable energy sector. It shows the company’s vision to grow upfront. The company has shifted its focus from a commodity-focused company to an FMCG, health, food and renewable energy company.
  • Control value variances 
  • Venture into premium and worldwide business sectors.
  • The company is setting up long-term contracts with many customers. It will provide revenue visibility. 
  • Ruchi Soya Industries is focusing on setting up tie-ups with many local restaurants and hotel chains. 
  • The company is focusing on innovation to meet customer needs fulfilling the quality standards.
  • The company has experienced Promoters and a supervisory director and management group. 
  • They have a focused framework with customer experience.
  • The biggest player in India in the consumable and edible oil segment. Ruchi soya has an exclusive right to more than two lakh hectares of land in India with the capability of palm oil development.
  • Wide and broad distribution network of 6,30,000 retailers.
  • The company also plan to expand their manufacturing unit capacity. It will increase their revenue and will reflect positivity in their operating margins.
  • Top FMCG players as one of the main Edible Oils manufacturers and a Pioneer of Soya Foods in India. It is likewise one of the biggest palm ranch organizations in India.
  • The company has smooth sales operation and capacity to meet the higher production due to expanding homegrown interest.
  • The company has high export revenue of around 43%. They export their items to Vietnam, Japan, Indonesia, Malaysia, South Korea, Europe, and the Middle East. 
  • They won renowned honours from SOPA for the ‘The Highest Manufacturer Exporter’ and by GLOBOIL for Highest Exporter of Edible Oil products.

WEAKNESS AND THREATS OF RUCHI SOYA FPO:

  • Regardless of top-notch items and great appropriation, Ruchi soya has restricted brand awareness compared to other brands. 
  • Ruchi Soya is vulnerable to fluctuation in raw material costs. The inaccessibility of the raw material is also another primary concern for them.
  • Ruchi Soya has just passed away from NCLT; their balance sheet still needs to account for various discrepancies.
  • COVID-19 has significantly hampered their estimated operating margins and projects delivery.
  • Their quality norms, competition and change associated with supply and demand can affect their business operation.
  • Only 16 plants are functional currently. In case of underutilization of the manufacturing units continue further, it will affect their growth. It will also affect the operating margins, revenue and financial ratios of the company.
  • Any changes in the law, guidelines and framework setup will influence their tasks and development possibilities. 
  • Ruchi Soya has diversified its product portfolio. The company has also stepped into the Renewable Energy sector. Their business will be affected if they don’t execute their growth plan properly.
  • The company is subject to Unsecured Loans from the promoter group, which can be renounced at any time. 
  • The company operates in a highly competitive business, so they need to be assured of their quality standards.

FINANCIAL TRENDS OF COMPANY:

  ₹ in Crores
RevenueExpensePATAssets
2018₹12029₹18040-₹5573₹7721
2019₹12829₹12753₹34₹7895
2020₹13175₹12965₹7715₹7868
2021 6M₹11523₹11157₹366₹8559
Price / EPS (PE)37.05   ROCE12.16 %   
Price / Sales1.91   ROE16.76 %   
Earning / Share23.02ROA7.56 %   
Dividend / Share0ROIC9.01 %   
Dividend / Yield0%   Ops Margin5.03 %   
Price / Book7.65   Net Margin4.54 %   
Market Capitalization31293.42 CrEBITDA Margin6.24 %   
Enterprise Value34370.24 CrAsset Turnover193.39 %
Cash EPS27.51
Retention Ratio1.00
Earnings Yield2.72   
Enterprise Value/ Revenue1.90   
Enterprise Value/ EBITDA28.66   
Market Cap/Sales1.91   
Forward PE0   
Trailing PE37.05   
EPS TTM28.56
Price / Sales TTM1.71   
Price to /Book MRQ7.76   
Price to /Cash Flow from Operation125.73   

Some of the Key Balance sheet financials are as follows:

Period31 March 202131 March 2020Growth
Common Stock59.1759.170 %
Current Liabilities1731.241217.8642.15 %
Total Liabilities4946.414496.7110.00 %
Current Assets3688.112608.7141.38 %
Total Assets9008.827867.6114.51 %
Working capital1956.861390.8540.70 %
Accounts Payable660.57164.89300.61 %
Inventory2363.361354.6174.47 %
Net Receivable556.17412.3734.87 %
Net Income From Continuing Ops680.777672.0291.13 %
Net Income680.777672.0291.13 %
Operating Income820.777717.8289.37 %
Total Revenue16318.6313117.7924.40 %
Operating Expense15497.8612821.6320.87 %
Interest Expense37.69-72.90151.70 %
Tax Expense-166.37-14.001088.36 %
Income Before tax514.407658.0293.28 %
Gross Profit2151.601106.5594.44 %
Dividend Paid-0.058-0.049118.13 %

Also Read : List of Mainboard IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.

COMPANY CONTACT INFORMATION:

Ruchi Soya Industries Ltd
Ruchi House, Royal Palms, Survey No. 169,
Aarey Milk Colony, Near Mayur Nagar,
Goregaon (East), Mumbai 400 065
Phone: +91 22 6109 0100 / 200
Email: ruchisoyasecretarial@ruchisoya.com
Website: http://www.ruchisoya.com/

RUCHI SOYA FPO REGISTRAR:

Link Intime India Private Ltd
Phone: +91-22-4918 6270
Email: ruchisoya.fpo@linkintime.co.in
Website: http://www.linkintime.co.in

RUCHI SOYA FPO LEAD MANAGER(S):

  • Axis Capital Limited
  • ICICI Securities Limited
  • SBI Capital Markets Limited
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