The Securities and Exchange Board of India (Sebi) on Monday allowed all investors in the follow-on public offering (FPO) of Ruchi Soya, barring those who participated in the anchor book, the option to withdraw their bids. The unprecedented directive from the regulator to Ruchi Soya comes in the wake of the “circulation of unsolicited SMSs advertising the issue”.
The regulator has made its views known to the merchant bankers and has observed that the “prima-facie contents of which (SmSs) appear to be misleading/fraudulent and not in consonance with Sebi ICDR (Issue of Capital and Disclosure Requirements) Regulations, 2018”. The stringent action by Sebi could result in a change in the final subscription numbers post March 30 and delay the completion of the FPO process.
While the exact contents of the text messages are not known, industry sources said they may have been related to the performance of the share price of the Ruchi Soya stock post the FPO. The window to enable investors to pull out their subscriptions will be open from March 28 to 30 and applicants will be informed of the process through advertisements in the newspapers.
The Ruchi Soya stock fell nearly 6% on Monday to close at Rs 815.05. The company’s Rs 4,300-crore FPO, which was priced in the range of Rs 615-690 apiece, was subscribed 3.60 times on the final day, on Monday. The company received bids for 175 million equity shares against the issue size of 48.9 million equity shares. The quota reserved for qualified institutional buyer (QIB) was subscribed 2.2 times, the portion for high-networth individuals (HNI) by 11.75 times and the quota for employees by about 7.8 times. The portion set aside for retail investors was subscribed 90% during the three-day FPO.
The FPO was primarily launched to help bring down the promoter stake to 75% to comply with Sebi norms on the free float of shares. Currently, the promoters hold a 98.9% stake in the company while the public shareholding is just 1.1%.
Post the FPO, the promoter shareholding was to decline to 80.8% while the public shareholding was to increase to 19%. The Patanjali Ayurved Group had acquired Ruchi Soya in 2019 through the insolvency process for Rs 4,350 crore.
In a statement, Ruchi Soya said a first information report (FIR) has been lodged with a police station at Haridwar to take up investigation in respect to circulation of the messages referred to by the Sebi under Section 67A of the Information Technology Act, 2000, and section 420 of the IPC, 1860. It denied the company, the promoter group or directors had issued any of the messages.