Ruchi Soya Extends Rally in Weak Market; increases 72% against the FPO price

Shares of Ruchi Soya Industries continued their move north, rising 7 percent to Rs 1,115 on the BSE in trading on Wednesday, in an otherwise weak market due to heavy volumes. Shares of the edible oil company were trading higher for the sixth straight day, having risen 19 percent over the period.

At 1:50 pm, Ruchi Soya was up 6.7 percent at Rs 1,110, compared with a 0.71 percent drop in the S&P BSE Sensex. The stock hit a 52-week high of Rs 1,377 on 9 June 2021. Over-the-counter trading volumes nearly doubled with a combined 10.98 million shares changing hands on NSE and BSE so far to write this report.

With the recent rally, shares in the Patanjali Ayurved-promoted company have risen 72 per cent compared to its follow-on public offering (FPO) price of Rs 650. The company had raised Rs 4.3 billion to reduce debt. The FPO was made to dilute the developer’s stake in the company in order to meet the minimum 25 percent public ownership rules. Following the FPO, the promoter’s stake in the company has been reduced from 98.9 per cent to less than 80.82 per cent.

The Ruchi Soya Industries board of directors also changed the name of the company to Patanjali Foods. “At their board meeting held on April 10, the directors also gave their approval in principle to assess the most efficient way to enhance synergies with Patanjali Ayurved Ltd’s food portfolio in any way on an equal footing,” said the company.

Ruchi Soya is recognized among the largest branded oil packaged food companies. Its ‘Ruchi Gold’ brand has a leading position in the market, as it is the best-selling palm oil brand in India and also the pioneers and largest soybean food manufacturers in India under the ‘Nutrela’ brand.

The company is recognized as one of the largest branded oil-packaged food companies with a strong portfolio of brands in various types of cooking oils in categories such as palm, soybean, mustard, sunflower, cottonseed, etc. with a strong brand portfolio of “Ruchi Gold”, “Mahakosh”, “Sunrich”, Ruchi Star and Ruchi Sunlight.

The company has expanded its packaged food portfolio through the acquisition of the ‘Patanjali’ product portfolio of biscuits, biscuits, biscuits, noodles and breakfast cereals, and is part of the Patanjali group, a leading consumer goods company. consumer goods and health and wellness from India.

“The edible oil industry in India is fragmented, where 13% of the oil is sold loose/unbranded and consumers are switching to branded oils, which is a huge market for their products. They believe this will allows them to manage costs more effectively than several of their competitors and also aids in the scalability of their edible oil business.It also gives them the flexibility to alter the product mix in line with any changes in product demand or in the availability or price of its key raw materials at any given time. Over the years, the company has developed relationships with some of the world’s largest oil suppliers,” HDFC Securities said in an IPO note. .

Its inland oilseed crushing plants generally process oilseeds harvested in India and are located in major soybean and mustard producing states in India. Its refining plants mainly use crude edible oil as feedstock, and it is normally imported by sea. Their operations throughout India also mean that they have proximity to regional markets throughout India, giving them the ability to serve customers efficiently. The location of the processing plants allows them to minimize in-and-out ground transportation costs, the brokerage firm said.

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