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    Ruchi Soya FPO: Don't recall similar action by SEBI, says JN Gupta

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    Ruchi Soya FPO: Don't recall similar action by SEBI, says JN Gupta

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    Market regulator SEBI has directed Ruchi Soya to give its retail investors the option of withdrawing their bids after unsolicited text messages surfaced, which were both misleading and fraudulent. To discuss this, CNBC-TV18 caught up with JN Gupta, Former ED, SEBI and MD, Stakeholders Empowerment Services, and Nikhil Kamath, Co- Founder, Zerodha and True Beacon.

    Ruchi Soya’s Rs 4,300 crore follow-on public offer (FPO), has been oversubscribed with the issue receiving bids 3.6 times of the shares on offer.
    However, the retail book was not fully subscribed and now SEBI has given retail investors the option to withdraw their applications after a few misleading text messages have surfaced. According to SEBI, prima facie the contents of the texts that have been circulating appear to be misleading and fraudulent.
    To discuss this, CNBC-TV18 caught up with JN Gupta, Former ED, SEBI and MD, Stakeholders Empowerment Services, and Nikhil Kamath, Co-Founder, Zerodha and True Beacon.
    Gupta stressed that he doesn’t recall seeing anything similar to SEBI’s action on Ruchi Soya in the last 4-5 years. He explained that Ruchi Soya’s price is not a fairly discovered price because of its low float.
    He said, “Where the floating has stopped, the price is not a fairly discovered price because of low volume and everything else.”
    Gupta believes SEBI should not have given the choice of withdrawing bids to institutional and high net worth individual (HNI) investors. “I would say that SEBI should not have given the choice to institutional investors and to HNI because I do not think that HNI or institutional investors would be acting on the basis of SMS. It’s only the gullible retail investors and maybe some employees under the pressure, that would have done it,” he said.
    He mentioned that he didn’t see any advertisement informing investors on the option to withdraw bids. He added that if the efforts are from bankers or the company then they will be punished. Gupta explained that bankers or the company cannot say anything other than in the prospectus.
    Meanwhile, Kamath of Zerodha, mentioned that the multiples seem to be relatively cheaper for Ruchi Soya compared to its peers.
    He said, “As a disclosure, a part of some fund has applied for FPO as well. When we looked at it, we saw a company after a long time coming into the IPO/FPO space which is reasonably profitable and on a comparative basis, if a comparison is done to a similar peer company like Adani Wilmar, the multiples seem to be relatively cheaper.”
    For the entire discussion, watch the accompanying video
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
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