Patanjali Ayurved Ltd. will sell Rs 4,300 crore worth of stake in Ruchi Soya Industries Ltd. to meet the minimum shareholding norms and pare the edible oil maker's debt.
Ruchi Soya has filed its draft red herring prospectus with the market regulator for a follow-on public offer, it said in an exchange filing. Patanjali, too, confirmed the share sale.
Patanjali acquired Ruchi Soya in 2019 by successfully bidding for the maker Sunrich oil under the Insolvency and Bankruptcy Code. Under Securities and Exchange Board of India's regulation, it has to bring down its holding below 90% within 18 months of acquisition since public shareholding fell below 10%. And then below 75% within three years.
The yoga guru Ramdev-backed company, according to its balance sheet for March 2020, has to sell 9.89% of total equity of Ruchi Soya to meet SEBI's first milestone. While Patanjali didn't disclose the price at which it will sell Ruchi Soya's shares, BloombergQuint's calculations peg it at Rs 1,469.7 apiece.
Ruchi Soya is trading around Rs 1,268 apiece.
According to data on the BSE, 99.97% of promoter shares in Ruchi Soya are encumbered. After the share sale, Patanjali's stake in the edible oil maker will come down to 89%.
The share sale plan by Patanjali comes about a month after Ruchi Soya informed exchanges that it will acquire Patanjali Natural Biscuits Pvt.'s business of manufacturing, packing, and labelling of biscuits, cookies, rusk and other associated bakery products in a related-party transaction.
And the parent wants to expand Ruchi Soya's product portfolio by using Patanjali Ayurved's distribution base.
Ruchi Soya reported revenue of Rs 13,118 crore and profit after tax of Rs 7,709 crore for the year ended March 2021. A year earlier, its revenue from operations stood at Rs 12,729 crore and profit after tax at Rs 27.8 crore.
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