1. Home
  2. stock market
  3. news
  4. SEBI allows investors to withdraw bids in Ruchi Soya FPO. Should applicants be worried?

SEBI allows investors to withdraw bids in Ruchi Soya FPO. Should applicants be worried?

SEBI allows investors to withdraw bids in Ruchi Soya FPO. Should applicants be worried?
  • SEBI has asked bankers of Ruchi Soya to allow investors to withdraw their bids in its follow-on public offer (FPO).
  • Also, asked the firm to send SMS to all applicants cautioning them about "circulation of unsolicited SMS" about the share sale.
  • On the other hand, the Baba Ramdev-led company has denied sending advertising messages to users and also filed an FIR against it.
  • However, should investors be worried about the move and take their bids back? Here are the details on the matter.
Yoga guru Baba Ramdev’s Patanjali Group firm Ruchi Soya Industries just caught itself in a tangle with markets regulator Securities and Exchange Board of India (SEBI).

The regulator has taken a rare step allowing investors to withdraw their bids from Ruchi Soya’s follow-on public offer (FPO).

So what happened?
The market regulator has found Baba Ramdev-owned company sending unsolicited promotional messages to its users to invest in its company Ruchi Soya’s shares through its FPO.

According to a report by Mint, the message reads like this -- “Great news for all beloved members of Patanjali parivar. A good investment opportunity in Patanjali Group. Patanjali Group company—Ruchi Soya Industries Ltd—has opened the follow-on public offer (FPO) for retail investors. The issue closes on 28 March 2022. This is available in the price band— ₹615-650 per share , i.e., discount of about 30% to market price. You can apply for shares through your bank/ broker/ ASBA/UPI in your demat account".

As soon as SEBI found this, it asked Ruchi Soya to open a window to allow applicants to withdraw their bids if they want, thinking many investors may have invested in the influence of the SMS.

Not only did SEBI allow investors to withdraw bids, it directed the lead banking managers of the FPO to issue a notice to all investors in the form of newspaper advertisements, cautioning them about the circulation of such unsolicited SMSes, on Tuesday and Wednesday.

Along with it, SEBI even directed to add the procedure for withdrawal by applications in the newspaper advertisements. The strong move by SEBI was to protect investors from investing under influence.

An SMS has also been sent to all the applicants informing them about the additional window provided to withdraw their bids.

Apparently, this is not the first time Ruchi Soya had an issue with the regulator. In October 2021, Baba Ramdev urged his audience to invest in Ruchi Soya stock during a yoga session. Later the video went viral, initiating a warning from SEBI.

About Ruchi Soya FPO
The company came up with FPO to pay off huge debt and thereby cutting promoter shareholding in the company in compliance with SEBI norms.

The company is one of the leading fast moving consumer goods (FMCG) brands in the Indian edible oil sector and also one of the largest manufacturers of soya foods.

Should Ruchi Soya investors be worried?
“They (Ruchi Soya) are now planning to rebuild the price. Although all of this may be a conspiracy since they already know the rules, I believe they are mature enough to get out of such a situation,” Ravi Singhal, vice chairman of GCL securities Limited said.

What does Ruchi Soya have to say on this?
The Baba Ramdev led company has denied sending advertising messages to users and also filed a first information report (FIR) against the circulation of unsolicited SMS advertising the company's FPO.

“We understand that there are SMS/messages in circulation in social media, speculating about investment in our Company’s issue and about equity shares of our Company being available at discount to market price (“Message”). We wish to bring to attention of the investors that this message has not been issued by company or any of our Directors, Promoters, Promoter Group or Group Companies,” the company said in a BSE statement.

SEE ALSO: raises $40 million to expand its presence in US and Europe
Hero MotoCorp shares tank 7% after IT raid reveals ₹1,000 crore bogus expenses’s latest report reveals that 6 in 10 companies will be hiring in the next three months


Popular Right Now