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Ruchi Soya – A Saga of Rags to Riches

Ruchi Soya, the manufacturer of edible oil, is one of the largest companies in this segment. Ruchi Soya is a great survivor of this stock market. It began its operation in 1986 and continued smoothly til 2010, but the company started facing problems in 2011 with its import duties and issues due to monsoon.

The overall debts with the banks were up to INR 9.3 to 5 Crore in 2017, and the company failed to repay its debts. The company soon became insolvent. However, today, it has managed to revive its position by taking a complete turnaround! So how did this happen? Let’s find out!

How Did Ruchi Soya Move From Rags to Riches? 

In 2019, Ruchi Soya managed to get a buyer – the Patanjali Group which offered it a resolution plan worth INR 4.35 Crore which included payment for their debts. The remaining amount was to keep the operations of Ruchi Soya running.

Patanjali Ayurved took over the complete management in 2020 and with that, the company soon entered the mainstream food products market.

Overhauling the management of a company is never treated as good news in the stock market and thus when Ruchi Soya got relisted in January 2020, the Ruchi Soya Share Price was just 16.9.

However, if the leadership of the company is strong enough, no one can stop the share of a company from attaining new highs. In just 6 months, Ru crossed price levels of INR 1,519!

The Road Ahead for Ruchi Soya 

Today, Ruchi Soya maintains a market capitalisation of INR 37,844.75 Crore and ranks among highly traded stocks for online intraday trading. The current Share Price is INR 1,044.10 (as of May 25, 2022).

The company features a chain of over 7 Lakh retail stores and more than 6,000+ distributors. In the last 12 months, the company generated revenues of INR 22,380.16 Crore. And is currently focusing more and more on coming up with new offerings in its product lines. 

According to a recent statement by the Ruchi Soya management, the company is planning to invest more in the Indian food processing sector to grow and aims to become the largest food company in the next five years in the country. 

The company has also announced its plans to demerge all food businesses of Patanjali Ayurved in Ruchi Soya Industries, which has already submitted an application to the market regulator SEBI for a Follow on Public Offer (FPO) to raise INR 4,300 Crore!

The company plans to use the FPO funds towards paying its debts and expanding its product lines. The company recently entered into the nutraceuticals segment and plans to further expand its businesses in sectors like personal care and beauty products.

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The Ruchi Soya Industries which was once bankrupt and has now taken the market strong in the last few months with its relisting on the stock exchange. The story of Ruchi Soya Industries is truly an apt example of Rags to Riches. It could have become a forgotten name in the world of online intraday trading, but with the right strategies and business acumen of its leadership, it has been successful in turning the tables!

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