Ruchi Soya Industries Ltd., on Wednesday, announced the resignation of Acharya Balkrishna as the managing director of the company with effect from 18 August citing “pre-occupation” as his reason for stepping down from the post.
His resignation was accepted by the board of directors, Ruchi Soya Industries said in a filing to the exchanges on Wednesday.
Shri Acharya Balkrishna has been designated as Non-Executive Non-Independent Director, liable to retire by rotation with effect from August 19, 2020, subject to the approval of members of the company. Sanjeev Asthana, chief executive officer at the company has been appointed as a key managerial personnel effective August 19.
Replacing Balkrishna is Ram Bharat, a whole-time director of the company, who will now take over the role of the managing director at the maker of Mahakosh and Ruchi Gold cooking oils effective 19 August till 17 December 2022.
Interestingly, Ram Bharat is Baba Ramdev’s younger brother and also actively involved in FMCG company PatanjaliAyurved’s running.
Ruchi Soya net profit falls 13% to ₹12 cr in the June quarter
The total income fell to ₹3,057 cr from ₹3,126 crores in the corresponding period last year
Patanjali Group firm Ruchi Soya on Wednesday reported a 13 percent decline in its net profit to ₹12.25 crore for the first quarter ended June 30
Patanjali acquires edible oil firm Ruchi Soya through an insolvency process
Patanjalicompleted the transfer of the equity and debt portion of its acquisition of Ruchi Soya through proceeding over insolvency and bankruptcy resolution. In the deal, 75% of the acquisition was financed by banks. Baba Ramdev-led Patanjali infused equity worth Rs 1150 crore and Rs. 3,200 crore was financed by banks.
Patanjali took a loan from a consortium of lenders led by the State Bank Of India. Patanjali took a loan of Rs 1,200 crore from SBI, Rs. 700 crore from Punjab National Bank, Rs. 400 crore from Syndicate Bank and Rs. 300 crore from Allahabad Bank.
Ruchi Soya turned multi-bagger in just 5 months, gained 8819%
Many of the brokerage firms and Fund manager were regretting their decision to not buy Ruchi Soya. After acquisitions of Ruchi soya by Ramdev baba’s Patanjali group Ruchi Soya relisted in the stock market for trading but not all the traders got his stocks as the Patanjali group own 98.87 % of stacks. Very limited volume for public trading and whoever got this stock right after the relisting become the gladdest person.
Earlier Ruchi soya was suffering due to corporate insolvency and then in September 2019 Patanjali group came in as a rescuer and acquired the company at 4,500 crore. In January stock got relisted and resumed trading at 16.10 and closed on 16.90 on BSE. Right after the five months of relisting the stock on June 26th, the stock closed at 1507.30 on BSE in just 5 months the stocks witnessed unexpected rise of 8,819% which means if you would have invested 10,000 on this stock at the time of relisting then you would end up gaining 881,900. Almost 9 lakhs rupees out of ten thousand in just five months.
While the coronavirus pandemic wreaked havoc, Ruchi Soya continued its upward march. It suffered losses on only 6 sessions since its relisting to June 26. The stock has emerged as the lockdown winner initially, as it rallied 1,026 percent from March 24 till June 26.
Ruchi Soya share price slips almost 60% from its all-time high in June
interestingly, after reaching a high of Rs1,535 per share, Ruchi Soya is hovering at around Rs 690 on the stock exchange. This also raises the question on possible stock manipulation in Ruchi Soya shares. Many investors are raising this question on social media, including Twitter.
The major reason for almost 9000 percent rise in Ruchi soya was its inherent value. an expert said during the relisting period the stock was undervalued and therefore the market turned in favor of this stock and given the rise which was necessary. But according to experts, there was circular trading going on to increase the price of the stock. It was the Patanjali group’s strategy to have onboard expert traders and do circular trading for at least 3 months of time.
Experts also say Ruchi Soya’s share price is not a reflection of its true value. It is only after the Patanjali group brings down its stake, the stock will reflect its true value. As per current rules, the company will have to increase its public shareholding to 10 percent in 18 months and to 25 percent within a three-year period.