Edible oil maker Ruchi Soya Industries -- controlled by yoga guru Ramdev-backed Patanjali Ayurved -- launched a follow-on public offer (FPO) worth up to Rs 4,300 crore on Thursday. The FPO will close for subscription on March 28.
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The company aims to utilise the proceeds of the public offer to meet its debt obligations and for other corporate purposes.
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On the eve of the FPO launch, Ruchi Soya said it raised Rs 1,290 crore from anchor investors, issuing 1.98 crore shares at a price of Rs 650 apiece.
Should investors go for Ruchi Soya's FPO? Here's what analysts say:
Ravi Singh, Vice President and Head of Research at ShareIndia, said, "Although the financials of Ruchi Soya are a bit weak, given the company’s strong base and background, and the demand for its products, investors may subscribe to this FPO."
"Due to the indefinite war between Ukraine and Russia, a hike in edible oil prices as well as a shortage in supply seems around the corner, at least for the short term. India's 90 percent sunflower oil requirement is catered by Ukraine and Russia, and sunflower oil comprises 15 percent of most edible oil brands," added Singh.
SBI Securities has not rated the FPO. "At the upper and lower end of the price band, the stock is valued at a P/E of 33.0-34.6 times its FY21 annualised earnings based on post-issue capital," the brokerage said in a report.
