Ruchi Soya Industries, aiming to rename and rebrand itself, was once more in the spotlight in the early hours of Monday. The stock rose 8%. The corporate board has approved changing the company’s name to Patanjali Foods Limited or any other name made available by the Registrar of Companies, according to the most recent regulatory filing.
The business will also assess the most effective way to increase synergies with Patanjali Ayurved’s food line. This has led to rumors that Ruchi Soya’s and Patanjali’s food businesses may merge. Following the news, Ruchi Soya Industries’ shares increased by more than 8% to Rs 999 on Monday before reversing course and falling to Rs 988.80 at 9.35 am. On Friday, the stock ended at Rs 924.85. On the other hand, when this report was written, the BSE Sensex was up 395.18 points, or 0.66 percent, at 59,052.
FPO Ruchi Soya
Only two days have passed since Friday’s follow-on public offering (FPO) of Ruchi Soya was listed on the bourses. The counter reached a high of Rs 882.55, up from its issue price of Rs 650, giving investors who bought shares in the public offering a gain of 36%. With proposals for 17,56 crore equity shares versus the offering size of 4,89 crore equity shares on the closing day, the FPO was 3,6 times oversubscribed. On March 24, the company that produces food and oil started its FPO to raise Rs 4,300 billion. In the meantime, Ruchi Soya declared on Friday that it had paid back loans to banks totaling Rs 2,925 crore and was now debt-free after raising Rs 4,300 crore in a follow-on public offering. Acharya Balkrishna, managing director of Patanjali Ayurveda Ltd, announced that Ruchi Soya is now debt-free.
The renaming is viewed as a strategic choice:
To increase the market share of both brands, Ruchi Soya has changed its name to Patanjali Foods Company. The industry leader in edible oils, Ruchi Soya, has a sizable client base and distribution network. On the other hand, Patanjali has established itself in the food sector thanks to its assortment of goods, which includes noodles, biscuits, and spices. Patanjali Foods Company aims to dominate the FMCG market by combining its strengths. Rajkotupdates.news : Ruchi Soya to be renamed Patanjali Foods Company Board Approves Stock Surges.
Patanjali Foods Company’s rebranding of Ruchi Soya is anticipated to result in several cost- and time-saving synergies. The business may now use its current infrastructure, including its production facilities, supply chain, and distribution networks, for its food goods. Higher profitability will result from cost savings and improved operational efficiency.
The company took a risk by changing the name of Ruchi Soya to Patanjali Foods Company to position itself as a significant player in the food sector. THEREFORE, the FMCG industry in India is primed for transformation because of Patanjali Foods Company’s strong distribution network, consumer base, and reputation.
Patanjali’s acquisition of Ruchi Soya
2019 saw the purchase of Ruchi Soya by Patanjali Ayurved for roughly $590 million (or 4,350 crore rupees). The purchase was a chance to diversify Patanjali’s product portfolio as part of its expansion goals. The acquisition also gave Patanjali access to Ruchi Soya’s lucrative soy-based foods and edible oils market.
Motives for Changing the Name of Ruchi Soya to Patanjali Foods Company
Changing the moniker of Ruchi Soya to Patanjali Foods Company accomplishes a number of objectives. Initially, it consolidates the Patanjali brand under a single awning, making it simpler for consumers to identify and recall. Second, it aligns with Patanjali’s growth objectives, which include expanding its product line and increasing its market share.The last benefit is that connecting Ruchi Soya’s goods with Patanjali, a reputable and well-known brand, enhances consumer perception of those goods.
I am renaming Ruchi Soya as Patanjali Foods Company has advantages:
Several advantages are anticipated due to Patanjali Foods Company replacing Ruchi Soya. First and foremost, it will improve Patanjali’s and Ruchi Soya’s brand awareness and recall. This will result in a more advantageous market position and a larger consumer base. Additionally, cross-selling opportunities and more significant revenue for both businesses are anticipated due to the product synergy between Patanjali and Ruchi Soya.
Impact of the Name Change on Ruchi Soya Shareholders:
The company’s stock price increased following the announcement that the board had approved Patanjali Foods Company as the new name for Ruchi Soya. Following the announcement, the stock jumped 10%, demonstrating investor support for the new branding and the potential for higher sales. According to analysts, the rebranding will improve Ruchi Soya’s market placement and client base, which will benefit the company’s stockholders over the long term. Rajkotupdates.news : Ruchi Soya to be renamed Patanjali Foods Company Board Approves Stock Surges.
Here is a 10-Point Synopsis of This Significant Narrative:
- Ruchi Soya’s stock edged down 0.74 percent to close at 918.05 on the BSE. It rose more than 8% to an intraday high of 999 before returning to the downside. It finished 0.56 percent lower at 918.25 on the NSE.
- After the shares were launched following the follow-on public offer (FPO), the stock price increased 12.94% on Friday.
- According to a BSE notice published on Thursday, “6,61,53,846 equity shares of Ruchi Soya Industries of Rs. 2 each fully paid up are listed and admitted for trading on the exchange with effect from Friday, April 08, 2022.”
- Before this, on Tuesday, Ruchi Soya told stock markets that it had approved the allocation of 6,61,53,846 equity shares for a total value of 4,300 crores following the FPO.
- The firm set the share price for the FPO offering at 650.
- The promotion was valid from March 24 to March 28.
- However, in an unusual move, market regulator SEBI on March 28 requested that bankers of Ruchi Soya, a company owned by the Ramdev-led Patanjali Group, allow investors to withdraw their bids in the FPO.
- The company had also received a warning from the Securities and Exchange Board of India for the “circulation of unsolicited SMS” regarding the share offering.
- According to SEBI guidelines, the FPO closed on March 28, and the withdrawal window was available from March 29 to 30.
- After SEBI ordered Ruchi Soya to allow investors to withdraw their bids, sources told the news agency PTI that almost 97 lakh bids were withdrawn by FPO investors.
The rebranding of Ruchi Soya as Patanjali Foods Company is a significant step in Patanjali’s expansion aspirations and is anticipated to provide numerous advantages for both businesses. Both businesses are set up for more significant income and market share in the upcoming years’ thanks to the unification of the Patanjali brand under one umbrella and the association of Ruchi Soya’s products with Patanjali’s reputable brand.