Sebi allows bid withdrawal in Ruchi Soya FPO – Times of India


MUMBAI: In a rare action, Sebi on Monday allowed investors to withdraw their bids for FPO shares of Ruchi Soya Industries, a Patanjali Group company, over misleading SMSs. The follow-on public offering (FPO) of Ruchi Soya closed with a subscription of 3.6 times as portions of the offer reserved for institutional and high net worth investors (HNIs) were subscribed multiple times.
The smooth sailing of the FPO, however, was hit by a Sebi directive to the company and the merchant bankers, asking them to give investors an option to withdraw their bids till March 30. The regulatory diktat came after the circulation of SMSs, asking investors to put money in the FPO, which Sebi thought was not proper. On Monday, the company informed exchanges about the directive.
In the last few days, SMSs were circulated saying the Ruchi Soya FPO, “at a 30% discount to market price and in the Rs 615-650-per-share range, was a good investment opportunity”. Investors were asked to subscribe to the offer, which was open till March 28. The regulator found such unsolicited messages to be misleading and fraudulent, and also violating Sebi rules. It asked the company and the three merchant bankers who managed the offer to give investors option till March 30 to withdraw their bids in the FPO.
Sebi asked the company and the merchant bankers to issue advertisements in newspapers about allowing investors to withdraw their bids from the FPO. However, anchor investors are not allowed to participate in this process, Sebi said.
In the FPO, compared to nearly 4.9 crore shares which were on offer, there was demand for about 17.6 crore shares when the books closed on Monday, BSE data showed. In the FPO, the institutional category was subscribed 2.2 times while the HNI category was subscribed 11.7 times and the portion reserved for employees was subscribed 7.8 times. The retail investors’ category was under-subscribed at just 90% (0.9 times), a company release said.
Through the FPO, the company aims to raise about Rs 4,300 crore of which Rs 1,290 crore was mobilised from a clutch of institutional investors just a day before the offer opened. SBI Capital Markets, Axis Capital and ICICI Securities managed the Ruchi Soya FPO.


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