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Market regulator SEBI has directed Ruchi Soya to give an option to investors, who participated in its follow-on public offer (FPO), to withdraw their bids. SEBI’s direction comes in the wake of circulation of unsolicited SMSes for advertising the FPO and luring investors.
SEBI has told the three investment bankers, who were handling the FPO, that prima facie the contents of the SMSes appear to be misleading/fraudulent and not in consonance with the ICDR (Issue of Capital and Disclosure Requirements) Regulations. The SMS lured people to invest in the FPO by giving share price projections, brokers said.
Issue subscribed 3.6 times
Ruchi Soya’s FPO was oversubscribed 3.6 times and closed on Monday. Its listing, however, will be delayed due to SEBI directions. There is a risk of FPO being undersubscribed if a large number of investors withdraw their bids.
“All investors/bidders (except anchor book participants) shall be given an option to withdraw their bids. The window for withdrawal shall be available on March 28, 29 and 30, 2022. The procedure for withdrawal shall be informed to investors and form part of the advertisement being issued,” SEBI said.
The qualified institutional buyer (QIB) portion of the FPO was subscribed 2.2 times, high-networth individual (HNI) portion 11.75 times and employee portion nearly 7.8 times. The retail portion of the FPO was subscribed by only 90 per cent.
Shares decline
Shares of Ruchi Soya declined by 5.96 per cent to close at Rs 815 on Monday. The FPO was priced in the range of Rs 615-Rs 650 per share, which was around 20-25 per cent lower than the last closing price.
Patanjali Ayurved owns 98.9 per cent stake in Ruchi Soya, while only 1.1 per cent is with the public. Post the FPO, Patanjali’s shareholding is expected to fall to 81 per cent.
Earlier in October 2021, SEBI had warned Ruchi Soya and Baba Ramdev for making dubious investment promises. Then in a video, Ramdev was seen asking his followers to buy shares of Ruchi Soya Industries, if they want to become crorepatis.
“It is noted that the referred address falls under ‘Public Communication’ as explained under Schedule IX of SEBI (ICDR) Regulations, 2018. Prima Facie, the attached address by one of the directors of the issuer company appears to be non-compliant with the following clauses of Schedule IX,” SEBI had said in the letter to Ruchi Soya’s board. Baba Ramdev is a non-executive director in the company.
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