What are the details of the IPO of Ruchi Soya Ltd?

It is not exactly an IPO but an FPO or follow on public offer since Ruchi Soya is already a listed company on the Indian stock markets. Ruchi Soya is owned by the Patanjali Ayurveda group of Baba Ramdev and it will launch a follow-on public offer (FPO) worth Rs.4,300 crore on 24th March. The FPO closes on 28th March. The actual price band for the FPO will be decided closer to the FPO opening date. This FPO has been in the works for over 6 months.

The whole idea of this FPO is to help Patanjali Ayurveda to comply with the 25% minimum public shareholding requirement under the SEBI regulations. Currently Patanjali group owns 98.9% in Ruchi Soya while public owns just about 1.1%. Post this FPO, Patanjali Ayurveda will reduce its stake in Ruchi Soya to 81%. Proceeds of the FPO will be utilized to expand business, repay outstanding loans and for working capital. It will take 2-3 years to bring down their stake to 75%.