Please refer to important disclosures at the end of this report
1
Incorporated in 1986, Ruchi Soya Industries Ltd (RSIL)
, a part of Patanjali
Group, is one of the leading FMCG brands in the Indian edible oil sector. It
is the larges
t manufacturers of soya foods with a presence across the entire
value chain in upstream and downstream businesses with secured palm
plantations. The firm operates in different verticals such as Edible oil and by-
products, Oleochemicals, Textured Soya prot
ein (TSP), Honey and Atta, Oil
Palm Plantation, Biscuits, Cookies, and Rusks, Noodles and Breakfast cereals,
Nutraceuticals and wellness, and Renewable energy wind power. Currently,
it is leveraging its brand "Neutrela" with a range of premium products lik
e
"Neutrela High Protein Chakki Aata" and "Neutrela Honey".
23 manufacturing units (17 plants are operational) across India
. It has a
strong network distribution of 97 sa
le depots, 4763 distributors, and
457,788 retail outlets.
Positives: (a)
Strong promoter pedigree of Patanjali group, a leading FMCG and
wellness-oriented brand (b)
Strong brand recognition of the products in the
Indian market (c)
Upstream and downstream integration and one of the key
players in Oil Palm Plantation (d) RSIL has s
trong, established and extensive
distribution network (e) An eff
ective strategy to procure the key raw materials
required for the business and have a track record of managing volatility in the
commodity prices and foreign exchange markets.
Investment concerns: Volatility in raw material prices
and increase in
competition could impact the profitability of the company.
Outlook & Valuation: In terms of valuations, the post-issue FPO
TTM P/E works
out to 26.6x (at the upper end of the issue price band), which is low
compared
to its peers Adani Wilmar (TTM PE -57.8x). Further, RSIL
has strong brand recall,
wide distribution, healthy ROE (FY21)
. Considering all the positive factors, we
believe this valuation is at reasonable levels. Thus, we re
commend a subscribe
rating on the issue.
Key Financials
Y/E March (₹ cr)
FY2019 FY2020
FY2021
9MFY22
Net Sales
12,729
13,118
16,319
17,542
% chg -
3.1
24.4
Net Profit
77
224
681
572
% chg -
192.5
203.4
OPM (%)
1.0
3.1
5.8
6.2
EPS (Rs)
2.1
6.2
18.8
15.8
P/E (x)
306.7
104.9
34.6
-
P/BV (x) (5.3)
6.7
5.6
-
RoE (%) (1.7)
6.4
16.1
-
RoCE (%) (0.5)
3.8
10.6
-
EV/Sales (x)
2.4
2.0
1.6
-
EV/EBITDA (x)
254.1
66.2
27.9
-
Angel Research; Note: Valuation ratios based on post-issue shares and at ₹650 per share.
Subscribe
Issue Open: March 24, 2022
Issue Close: March 28, 2022
QIBs 50%
Non-Institutional 15%
Retail 35%
Promoters 80.8%
Public 19.2%
Fresh issue:
₹4,300cr
Issue Details
Face Value: ₹2
Present Eq. Paid up Capital: ₹59.2cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital:
₹72.4
cr
Issue size (amount):
₹4,300cr
Price Band:
₹615
-650
Lot Size: 21 shares
Post-issue mkt.cap:
₹22,263
*– 23,530cr**
Promoter holding Pre-Issue: 98.9%
Promoter holding Post-Issue: 80.8%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Amarjeet S Maurya
Amarjeet.maurya@angelbroking.com
+022 4000 3600, Extn: 6810
Ruchi Soya Industries Ltd
FPO Note |
FMCG
March
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Ruchi Soya Industries Ltd| FPO Note
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Company background
Ruchi Soya Industries Limited (“Ruchi Soya”) was incorporated on 6 th January,
1986. Pursuant to completion of the Corporate Insolvency Resolution Process
and upon implementation of the Patanjali Resolution Plan, the company was
acquired by its current promoters.
Ruchi soya is 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.
They are the pioneers and largest manufacturers of soya foods under their 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 their packaged food portfolio by acquiring
the ‘Patanjali’ product portfolio of biscuits, cookies, rusks, noodles, and
breakfast cereals.
Ruchi Soya has a total of 23 processing plants (of which 17 are currently
operational) across India, out of which 10 such processing plants form their oil
crushing and refinery units, and 1 biscuit manufacturing plant with yearly
processing capacity of 27,900 MT.
The company has pan India network of over 97 sale depots, 4,763 distributors
who in turn reach out, directly to 457,788 retail outlets in the urban, semiurban
and rural areas of the country.
Issue details
Ruchi Soya Industries FPO is raising ₹4,300
cr through fresh issue in the price
band of ₹615-650.
Exhibit 1: Pre and post FPO shareholding pattern
No of shares (Pre-issue) % (Post-issue) %
Promoter 29,25,76,619 98.90% 29,25,76,619 80.82%
Public 32,64,708 1.10% 6,94,18,554 19.18%
Total 29,58,41,327 100.00% 36,19,95,173 100.00%
Source: Source: RHP, Note: Calculated on upper price band
Objectives of the Offer
Repayment and/or prepayment, in full or part, of certain borrowings
availed by the company -₹2,664cr
Repayment/prepayment of borrowings – ₹593cr and
General corporate purposes.
Ruchi Soya Industries Ltd| FPO Note
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Exhibit 2: Profit & Loss Statement
Y/E March ( ₹ cr) FY2019 FY2020 FY2021 9MFY22
Net Sales
12,729
13,118
16,319
17,542
% chg
3.1
24.4
7.5
Total Expenditure
12,607
12,717
15,365
16,461
Raw Material
11,415
11,595
14,167
15,373
Personnel
151
153
140
136
Others Expenses
1,041
969
1,058
951
EBITDA
122
401
954
1,081
% chg
228.8
138.0
13.3
(% of Net Sales)
1.0
3.1
5.8
6.2
Depreciation& Amortisation
138
136
133
100
EBIT (16)
265
821
981
% chg (1,724.6)
209.6
19.6
(% of Net Sales) (0.1)
2.0
5.0
5.6
Interest & other Charges
7
112
371
269
Other Income
100
7,505
64
67
(% of PBT)
130.4
98.0
12.5
8.5
Recurring PBT
77
7,658
514
779
% chg
9,883.1
(93.3)
51.4
Tax - (14) (166)
207
(% of PBT) - (0.2) (32.3)
26.6
PAT (reported)
77
7,672
681
572
Extraordinary Items -
7,448
- -
ADJ. PAT
77
224
681
572
% chg
192.5
203.4
(16.0)
(% of Net Sales)
0.6
1.7
4.2
3.3
Basic EPS (₹)
2.1
6.2
18.8
15.8
% chg
192.5
203.4
(16.0)
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Balance Sheet
Y/E March (₹ cr) FY2019 FY2020 FY2021
SOURCES OF FUNDS
Equity Share Capital
67
207
221
Reserves& Surplus
(4,543)
3,312
4,003
Shareholders Funds
(4,477)
3,518
4,225
Total Loans
7,914
3,467
3,494
Deferred Tax Liability
- - -
Total Liabilities
3,437
6,985
7,718
APPLICATION OF FUNDS
Net Block
5,224
5,070
4,954
Capital Work-in-Progress
27
25
27
Investments
31
20
30
Current Assets
2,655
2,752
3,831
Inventories
1,261
1,355
2,363
Sundry Debtors
262
274
438
Cash
430
455
387
Loans & Advances
566
512
488
Other Assets
136
156
154
Current liabilities
4,500
883
1,290
Net Current Assets
(1,845)
1,870
2,540
Deferred Tax Asset
- -
166
Total Assets
3,437
6,985
7,718
Source: Company, Angel Research
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Exhibit 3: Cash Flow Statement
Y/E March (₹ cr) FY2019 FY2020
FY2021
Profit before tax
77
7658
514
Depreciation
138
136
133
Change in Working Capital
32
(516)
(732)
Interest / Dividend (Net)
(5)
80
333
Direct taxes paid
19
(3)
(5)
Others
(22) (7415)
3
Cash Flow from Operations
240
(61)
247
(Inc.)/ Dec. in Fixed Assets
(7) (19)
(20)
(Inc.)/ Dec. in Investments
(105) (6)
(24)
Cash Flow from Investing
(112) (26)
(44)
Issue of Equity
0
205
0
Inc./(Dec.) in loans
0
(497)
26
Dividend Paid (Incl. Tax)
0
0
0
Interest / Dividend (Net)
(7)
374
(336)
Cash Flow from Financing
(7)
82
(311)
Inc./(Dec.) in Cash
121
(4)
(108)
Opening Cash balances
37
158
154
Closing Cash balances
158
154
46
Source: Company, Angel Research
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Key Ratios
Y/E March FY2019
FY2020 FY2021
Valuation Ratio (x)
P/E (on FDEPS)
306.7
104.9
34.6
P/CEPS
109.5
65.3
28.9
P/BV
(5.3)
6.7
5.6
EV/Sales
2.4
2.0
1.6
EV/EBITDA
254.1
66.2
27.9
EV / Total Assets
9.0
3.8
3.4
Per Share Data (`)
EPS (Basic)
2.1
6.2
18.8
EPS (fully diluted)
2.1
6.2
18.8
Cash EPS
5.9
9.9
22.5
Book Value
(123.7)
97.2
116.7
Returns (%)
ROCE
(0.5)
3.8
10.6
Angel ROIC (Pre-tax)
(0.5)
4.1
11.2
ROE
(1.7)
6.4
16.1
Turnover ratios (x)
Asset Turnover (Net Block)
2.1
2.2
2.7
Inventory / Sales (days)
36
38
53
Receivables (days)
8
8
10
Payables (days)
64
5
15
Working capital cycle (ex-cash) (days)
(20)
41
48
Source: Company, Angel Research
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Research Team Tel: 022 - 40003600 E-mail: research@angelbroking.com Website: www.angelone.in
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