Ruchi Soya Industries Limited company is a diversified FMCG and FMHG focused company, with strategically located manufacturing facilities and well recognised brands having pan India presence.They are one of the largest FMCG companies in the Indian edible oil sector and one of the largest fully integrated edible oil refining companies in India. Being the pioneers and largest manufacturers of soya foods has aided the brand 'Nutrela' in becoming a household and generic name in India. They are across the entire value chain in palm and soya segment, with a healthy mix of upstream and downstream business. Currently it, is leveraging upon the brand 'Nutrela', they have launched a range of premium edible oils and blended edible oils and 'Nutrela High Protein Chakki Atta' and 'Nutrela Honey' in Fiscal 2021. Further they have expanded the packaged food portfolio by acquiring the 'Patanjali' product portfolio of biscuits, cookies, rusks, noodles, and breakfast cereals. Ruchi Soya Industries currently, is a part of the Patanjali group, one of India's leading FMCG and health and wellness company. Their portfolio includes health and ayurvedic products, cosmetics, processed food, beverages and juices, and personal and home care products. They leverage Patanjali's expertise and technical know-how in nutraceuticals and benefit from the synergy in the research and development and the pan India distribution network.They have been allocated zones, to undertake palm plantation, by the Government, which assists them in backward integration of sourcing palm oil. They are one of the largest integrated oil seed solvent extraction and edible oil refining company in India. They have presence across a wide spectrum of products including (a) Edible oil (b) Hydrogenated fats (vanaspati) and bakery fats and (c) By-products and derivatives of edible oil.They are recognized amongst the largest branded oil packaged food company with a strong portfolio of brands in various types of cooking oils under categories such as palm, soyabean, mustard, sunflower, cottonseed etc. The Company's robust brands portfolio of 'Mahakosh', 'Ruchi Gold', 'Ruchi Star', 'Sunrich', 'Soyumm', 'Tulsi', 'Ruchi No.1', 'Bakefat', 'Avanti', and vanaspati and other brands, are well positioned in the market. The brand, ‘Ruchi Gold’ has a market leadership position, on account of being India's highest selling palm oil brand. As per financial performance, Ruchi Soya Industries has posted total income/net profits of Rs. 12,029.28 cr. / Rs. (5,573.27) cr. (FY18), Rs. 12,829.25 cr. / Rs. 34.12 cr. (FY19), Rs. 13,175.26 cr. / Rs. 7,714.16 cr. (FY20), Rs. 17,608.19 cr. / Rs. 582.86 cr. (Q3 FY22). So company has shown improvements over last couple of years after being acquired by Patanjali Group. Ruchi Soya has posted an average EPS of Rs. 321.23. and average RoNW of 2027.40% for last three fiscals. Issue is priced at a P/BV of 4.37 as per NAV of 148.82 on 30.09.21. If we attribute latest earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 34.5 and as per FY22 annualised earnings P/E is around 30.2, which looks fully priced. Only concern is higher debt value. As per RHP, comparison between listed players is shown in above table. On BRLM's front, three BRLMs are associated with this IPO, and have handled around 81 IPO in last three fiscals. From last 10 IPOs, two are opened below issue price and remaining are opened above issue on the day of listing. As of now, two are trading below and other are trading above issue price. ( As on 21.03.22) As per financials, Ruchi Soya has shown improvements in result, RoNW is 12.1% for TTM and issue is priced at P/E of around 35.5 and 30.2 respectively as per FY21 and annualised FY22 earnings. FMCG sector has good growth opportunity and brand visibility of company is good, so we expect company may out-perform sector growth. The issue is fully priced as per latest earnings, but high value of debt is a concern. So we give SUBSCRIBE rating to this IPO.
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