Ruchi Soya Industries Ltd. IPO
Patanjali Foods Ltd.
IPO Listing Details
Listed On
BSE & NSE
Listed On
Issue Price
₹650
Issue Price
Listing Price
₹850
Listing Price
Listing Gains
+₹200.00 (+30.77%)
Listing Gains
IPO Details
Bidding Dates
24 Mar - 28 Mar '22
Bidding Dates
Min. Investment
₹12,915
Min. Investment
Lot Size
21.00
Lot Size
Price Range
₹615 - ₹650
Price Range
Issue Size
4,299 Cr
Issue Size
Subscription Rate
- Retail Individual Investor0.90x
- Non-Institutional Investor11.75x
- Qualified Institutional Buyers2.20x
- Employees7.76x
About Company
Ruchi Soya, founded in 1986, is a diversified FMCG company with its presence predominantly across edible oil, palm oil and TSP (textured soyabean products) products. Nutrela - The largest soybean brand in India, is one of the many brands associated with this company, which include Sunlight, Sunrich and Ruchi Gold across its product categories. Patanjali Group purchased a 98.9% stake in the company in 2019 in an insolvency proceeding for INR 4350 Crs. SEBI guidelines state that all listed companies must have at least 25% public shareholding. Hence, a Follow-on Public Offer (FPO) is being issued for INR 4300 Crs to meet these set guidelines. The FPO will list on 24th March 2022.
Why should you invest in Patanjali Foods Ltd. IPO?
- The offer is available at a TTM P/E (trailing twelve months, price/earnings ratio) of 26.6x at the upper end of the price band, as compared to rival Adani Wilmar with a TTM P/E of 253.8x
- Strong brand recognition in the soya bean space, allowing for greater brand recall with its brands
- Available at a reasonable discount to the current market price. With a price band of 615 – 650 compared to the closing price of 873 as of 24th March, it is available for a 42% & 34% discount on the lower and higher ends of the band, respectively.
Patanjali Foods Ltd. IPO - SWOT Analysis
Strengths:
- A solid promoter base with a vision to make Patanjali & Ruchi Soya India’s number 1 FMCG brand in a five year period.
- Brands such as Nutrela and Sunlight across product categories enjoy excellent brand recall, which will help in overall sales growth.
- Fully integrated edible oil refiners in India, with forward and backward integration capabilities available from plantation to refining, allowing it to be more cost-effective than its competitors
- The proceeds from the FPO will be used to retire a Rs 3300 Cr term loan, which will make the company debt-free.
Weaknesses:
- Declining net cash flow: The company had a net decrease in Cash flow of Rs -107 Crs predominantly driven by financing activities.
- Significant dependence on edible oil products sales, which increases concentration risk.
Opportunities:
- Leveraging Patanjali’s technical know-how, expertise and distribution network to grow the combined entity
- Patanjali’s food portfolio can lead to multiple synergies across brands.
- The company has also ventured into the health and wellness space with a launch of a brand of Nutraceuticals under the combined Patanjali and Nutrela brand.
Threats:
- Ongoing litigation proceedings could adversely affect its future business potential and growth
- Changing weather patterns could affect the output generated going forward
A competitive analysis
- The largest manufacturer of soya foods, with its brand Nutrela having a 40% market share
- The company is trading at a P/E of 32, which is lower than the Nifty FMCG P/E of 37, showing upside potential at the current market price.
How to apply for Patanjali Foods Ltd. IPO?
You can apply for the Patanjali Foods Ltd. IPO in these ways:
UPI
Link your personal bank A/C to a trusted UPI ID and map it with your TradeSmart account. Now, proceed further to book your IPO. On acceptance of the mandate, the bid amount will get blocked in your bank account Learn more.
Demat Account
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