Ruchi Soya Industries Ltd.'s stock slumped close to 20% but pared some of the losses after the edible oil maker allotted shares offered via its follow-on public offering.
The company approved allotment of 6.61 crore shares it had offered pursuant to its FPO, according to an exchange filing after market hours on Tuesday. It raised a total of Rs 4,300 crore via the FPO.
The Baba Ramdev-backed company's FPO faced issues as the market regulator ordered opening of a withdrawal window in a rare action.
The Securities and Exchange Board of India said misleading and unsolicited messages about its share sale were spread, following which the edible oil maker filed a complaint with the Haridwar Police.
The withdrawal window saw most foreign investors pulling out. But only a minor pullback was witnessed from high net-worth and small retail investors.
In total, 14,583 applications amounting to 97.4 lakh shares were withdrawn as on March 30, according to BSE data.
Share of Ruchi Soya tumbled as much as 19.35%, the most since March 21, on Wednesday. The stock pared part of the losses to end 13.7% lower.
The stock fell below the 50-day simple moving average, indicating a potential downward price momentum. Trading volume was nearly 56 times the 30-day average volume at this time of the day.
The fall in the market price is contrary to strong fundamentals of the company, Deven Choksey, managing director at KRChoksey Holdings Pvt., told BloombergQuint. "When Ruchi Soya merges into Patanjali, it would be a large FMCG play, which could rerate the valuations to north of 40x from less than 30x price-to-earnings ratio currently. It is an opportunity for long term investors when they buy in dips."
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
