Categories: MoneyBite-Weekly Newsletter

Ruchi Soya FPO- All that you should know

Short bites to keep you informed of matters that impact your wallet and wealth
(The web version of our weekly newsletter)

We are at the fag end of this financial year and there are some deadlines that are tied to the end of this FY or 31 Mar 2022. Some of which are linking your PAN & Aadhaar and completing your KYC for your Demat and Banking accounts. Your Demat account may get deactivated if you do not complete your KYC.

An event that has got the market interested currently is the Ruchi Soya FPO.

Hop on to our Top Bite section to know more about what is an FPO and about the details of the Ruchi Soya FPO.

Top Bite this week

What’s going on here?

After a gap of 1.5 months, a public offering has hit the market in the form of a Rs 4300 cr FPO from Ruchi Soya. The offer opened on 24 March and will close on 28 March.

What is an FPO?

You must be familiar with the term IPO, but did you notice the offering from Ruchi Soya is called an FPO? Follow On Public Offer is a process in which a company already listed on the stock exchange offers further shares to the public. This is done to expand the equity base of the company.

Main features of the Ruchi Soya

Ruchi Soya was acquired by the Baba Ramdev-led Patanjali group in a bankruptcy sale in 2019. The company is the largest manufacturer of edible oil in India. After the acquisition by Patanjali, the company has diversified into the manufacture of other food products like biscuits, cookies?, ready-to-eat breakfast cereal? and nutraceuticals under the parent’s brand.

Ruchi Soya has been ranked ⬆175 in the top 250 consumer companies in the ” Global Powers of the Consumer Products Industry, 2012 according to a report by Deloitte Touche Tohmatsu.

After the FPO, Patanjali’s share in the company will come down from 98.9% to 81%. The funds raised from the FPO will be used to pay off debt, for working capital? requirements and general corporate purposes.

The FPO price is at a discount to the current market price of Rs 880( as on 25 Mar).

FPO details

Here are the price and other details of the FPO

Price Band – Rs 615 – Rs 650
Minimum lot size – 21 shares
Minimum Investment – Rs 12915 – Rs 13650 per lot
FPO Open & Close Date – 24 -28 Mar 2022
Allotment Date – 31 Mar 2022
Credit of shares in Demat account – 05 Apr 2022

How can you apply to the FPO?

You can apply to the FPO through your DEMAT account. If you don’t have one, get one in minutes on your Fisdom App to start your investment journey.

You Ask We Answer

Are passive investing products like Index funds risk-free and do they guarantee returns ? – Reshma Jayakumar

No, passive investing products cannot be called risk-free as they represent the Index. When there are factors affecting the entire market like the pandemic or the military action in Ukraine, index funds could also see volatility in line with the market. Neither, do they guarantee returns.

But, as passive funds invest only in the index stocks their expense ratio is lesser compared to an actively managed fund. That is why index funds could end up with greater returns than actively managed funds over longer periods.