By Malvika Gurung
Investing.com -- The Patanjali Ayurved-led edible oil manufacturer Ruchi Soya (NS:RCSY) has set the price band of its follow-on public offer (FPO), hitting the capital market on March 24, 2022, at Rs 615-650/share.
The FPO will raise to Rs 4,300 crore, comprising equity shares of face value Rs 2 apiece, and the issue will close on March 28.
As the higher price band of the offer set at Rs 650/share was at a 35% discount from the closing price on Thursday, shares of the Baba Ramdev-led company plunged 17.3% to 831 apiece in early trade on Monday, and was trading 8.9% lower at Rs 915 apiece while writing.
According to the red herring prospectus, shares of the company will be credited on April 5, while the trading will start from Apr 6.
The Head of Research at Share India Securities states that despite the company’s financials being a bit weak, investors could potentially subscribe to the FPO, due to its strong base and background, along with its products’ requirements.
An FPO means issuing additional shares after an IPO, and as per SEBI’s requirement of a public shareholding of at least 25% in a business, Ruchi Soya is launching additional shares.
This is because currently, the Baba Ramdev-led Patanjali Group holds 98.9% of the edible oil manufacturer, while public shareholders own about 1.1%.