Since the restructuring of Ruchi Soya, public holding in the stock has gone significantly down while the promoter holding now stands at a staggering 99.03%.
Ruchi Soya’s share price today once again hit the upper circuit, surging 5% in Friday’s trade, helping the stock climb to Rs 1,507. With this, the edible oil manufacturer has done what none could have imagined earlier this year in January when the shares of Ruchi Soya were relisted on the bourses — it has overtaken Marico Ltd in terms of market capitalisation. On June 26, the market capitalisation of Ruchi Soya stood at Rs 44,592 crore, while that of Marico Ltd was Rs 44,482 crore. Ruchi Soya was earlier last year acquired by Baba Ramdev’s Patanjali Ayurveda through the NCLAT for Rs 4,350 crore.
Since the restructuring of Ruchi Soya, public holding in the stock has gone significantly down while the promoter holding now stands at a staggering 99.03%. Analysts suggest that the true value of the company will only be reflected once Baba Ramdev-led Patanjali group starts reducing its stake in the company and the public float increases. “The holding of the promoter group is too high and when this trend reverses the situation might change. I would like to avoid the stock as the valuation looks pretty high compared to many other good and stable companies,” Vishal Wagh, Head of Research, Bonanza Portfolio told Financial Express Online.
Since relisting in December this year, at a price of Rs 16.9 per share, the stock price has seen growth, unlike any other share, despite the volatile equity market seen this year. Ruchi Soya shares are now trading at Rs 1,507 per share, a jump of 8,818% in six months. The market cap of Ruchi Soya has not just overtaken Marico, but even Punjab National Bank and Union Bank of India, two of the banks that lent money to Patanjali Ayurveda to buy Ruchi Soya.
As of now the public shareholding in Ruchi Soya stands at a mere 0.97% with only 28 lakh shares. The company will have to increase its public shareholding to 10% in 18 months and then improve it to 25%. Analysts who do not cover Ruchi Soya said that the high promoter holding and low public float has been helping the share shoot up significantly. Marico, on the other hand, has been lauded by market participants for its resilient portfolio and the stock attracts a BUY rating from brokerage firm Motilal Oswal.