Ruchi Soya FPO Opens – Should You Invest in Ruchi Soya FPO?

The Rs. 4300 crore Ruchi Soya FPO has opened for subscription on 24th March 2022 and will be available till the 28th of March 2022.

Founded in 1986, Ruchi Soya is a top ranking player in the FMCG segment, especially in the domestic edible oil sector. The company also ranks as the largest manufacturers of soya foods with massive presence across the entire value chain in upstream and downstream businesses with secured palm plantations.

Ruchi Soya’s product offerings include edible oil and by-products, honey, atta, oleochemicals, textured soya protein, biscuits, cookies and breakfast cereals, nutraceuticals and wellness products.

The company has recently ventured into premium products such as Neutrela High Protein Chakki Aata and Neutrela Honey to leverage on its popular brand Neutrela.

The company owns 22 manufacturing units and has a well-established distribution network comprising 100 sales depots, over 4700+ distributors and more than 4.5 lakh retail outlets.

According to the Red Herring Prospectus, the company will be using the proceeds from the issue towards funding capital expenditure for repayment/prepayment of borrowings, funding working capital requirements and for general corporate purposes.

Price band of Ruchi Soya FPO

The price band for FPO is between Rs. 615 to Rs. 650 per share

Lot size

The minimum lot size for FPO is 21 shares.

Issue size

The issue size for Ruchi Soya FPOis Rs. 4300 crores.

Listing date

Shares are likely to be listed on 6th April 2022.

Key strengths and opportunities

• Backed by the Patanjali group, a leading player in the FMCG segment in India
• Wide range of product offerings in the FMCG category
• Huge brand recall value
• Well-established distribution network across the country
• Leading player in branded edible oil and packaged food business
• Well-established manufacturing capabilities
• Experienced and professional management

Key factors to keep in mind before you invest in the Ruchi Soya FPO:

In its Red Herring Prospectus, the company has listed some factors which may affect the company’s future performance of the company, such as:

• The company’s inability to anticipate, respond to and meet the tastes, preferences or consistent quality requirements of its consumers or inability to accurately predict and successfully adapt to changes in market demand could reduce demand for our products and in turn, impact the company’s sales.
• The company is dependent on almost entirely on third-party suppliers in respect of availability of its raw materials. Any disruption in interruption in the supply of such products and price volatility could adversely affect the company business, results of operations and financial condition.
• Any fluctuations in exchange or prices of agricultural commodities may adversely impact the results of company’s operations.
• There is intense competition in the FMCG segment where the company operates from multinational manufacturers and marketers.
• For detailed information on the risks associated with the IPO, please refer to the Red Herring Prospectus.

– Written and contributed by Pradeep Sukumaran.