Founded in 1986, Ruchi Soya is one of the largest manufacturers of edible oil in India which has been acquired by Yoga Guru Baba Ramdev Patanjali Ayurved in 2019.
Ruchi Soya has been leader in edible oil and Soya food in India. Top brands include Mahakosh Soyabean, oil, Ruchi Gold Plamolein, Sunrich sunflower oil.
• Nutrela, largest soya brand holds more than 50 % Market share
Since its foundation, Ruchi Soya made a loss of 878.7Cr in the year ended 2016.
• Loss was due to crash in global prices of the castor seed in Jan 2015 from Rs 5,100 per quintal to Rs 3,051 per quintal
• In May 2016, SEBI had barred Ruchi Soya industries from securities market for fraudulent and manipulative trading in castor seeds at NCDEX
Financials:
• FY17- Mkt cap – Rs 907.1 Cr and Net profit (Rs -1,362.6 Cr)
• FY 18- Mkt cap- Rs 529.6 Cr and Net Profit (Rs -5,754.6 Cr)
• Net sales- Rs 31,561.2 Cr (FY 14-15) to Rs 12,027.1 Cr (FY 17-18)
To acquire Ruchi Soya it was a Two Horse race between Adani Wilmar and Patanjali who had given their bid of Rs 54.74bn and 57.65bn, respectively.
? In April 2019, Patanjali Ayurved acquired Ruchi Soya for Rs 4,350 Cr which led Patanjali acquire edible oil plants and brand liked Nutrela, Mahakosh and Ruchi Gold
? Patanjali group holds 99.03% of the shares while 0.97% are owned to public. As per market regulation Patanjali group will have to over time reduce its shareholding to the maximum permissible limit of 75%
Amid the coronavirus pandemic, Ruchi Soya was relisted at Rs 17/Share on 27th January which has surged over 6,200% to a lifetime high at Rs 1,250/share (as on 22nd Jun 2020), taking its Mcap to Rs 31,693 Cr. The stock is trading in the compulsory delivery window @5% circuit limit
Mkt share of Ruchi Soya has been higher than known Indian listed firms such as Bosch Ltd, PNB, Motherson Sumi Ltd and many more
Turnaround after debt restructuring and low free float are the main reasons for such a sharp surge rally in the stock.
Patanjali has targeted a turnover of Rs 25,000 Cr in FY’20, Rs 12,000Cr would come from Patanjali group and Rs 13,000 Cr from Ruchi Soya
Patanjali Ayurved achieved a revenue of Rs 3,562cr in Apr-Sep 2019-20
Patanjali revenue rose by 2% to Rs 8,329 Cr in FY19
Patanjali is expected to launch 3 new products under Nutrela brand targeting health conscious people
“We are expecting 3 times growth from Ruchi Soya in coming years, “Baba Ramdev said, adding it will also lessen burden of imports of edible oil from other countries and make India self-dependent in this sector.
Patanjali is expected to liquidate 20-25% of the shares in next 2.5years
What do you think, will investors see further rise in Ruchi Soya shares or it may drastically fall?
From The Representative:
https://therepresentative.co.in/
Reference:
- https://www.bloombergquint.com/markets/what-explains-the-over-6200-jump-in-ruchi-soyas-share-price
- https://economictimes.indiatimes.com/
- https://timesofindia.indiatimes.com/business/
- https://www.business-standard.com/article/
- https://www.livemint.com/companies/news/
- https://www.news18.com/news/business/
