The company Ruchi Soya Industries, now owned by Patanjali Ayurved, will use Rs 2,663 crore from its share sale to repay part of its debt and utilize another tranche of Rs 593 crore for the working capital of the organization.
The company has acquired the biscuits and noodles units from entities owned by its promoters for around Rs 65 crore just before the follow-on public offer (FPO) came up.
Ruchi Soya, in its prospectus, mentioned that the share sale proceeds will be utilized towards prepayment/repayment of debt availed in the form of NCDs issued by the company to one of their promoters. “We believe that such prepayment will help reduce our outstanding indebtedness and debt servicing costs, and enable utilization of our accruals for reinvestment in our business growth and expansion,” it said.
The firm said, Patanjali Ayurved, Yogakshem Sansthan, Patanjali Parivahan, and Patanjali Gramudyog Nayas holds 98.87% of its pre-issue paid-up capital.
The share sale should help the promoters in bringing down their stake from 98 % to meet Sebi norms on minimum public shareholding i.e – 25%.
With Patanjali taking up the company, the stock has skyrocketed and the company’s market capitalization has touched Rs 37,000 croredue to low liquidity in the stock.
As of Tuesday, its shares traded at Rs 1,250 per share, with promoters likely to dilute their stake by 9% in the company through the FPO.
According to the company, the promoter entities, have pledged their shares in Ruchi Soya to a group of banks, including – The State Bank of India, Union Bank of India, Canara Bank (erstwhile Syndicate Bank), Indian Bank (erstwhile Allahabad Bank), and Punjab National Bank.
The company also revealed that it acquired a few businesses owned by its promoters in the months of May and June.
Ruchi Soya further stated that it has also acquired the noodles and breakfast cereal business from Patanjali Ayurved this month.