Corporate

Time For Tofu


Patanjali-backed Ruchi Soya Industries is all set to raise Rs1,290 crores from a bunch of anchor investors, ahead of its follow on public offering (FPO).

An FPO is like an IPO, in the sense that companies use it to raise money from the public. The difference is that the company is already publicly listed and has had an 'initial' public offering (IPO).

The case of Ruchi Soya is actually quite interesting. Here's a quick recap:

Ruchi Soya Industries, one of India’s largest producers of edible oil went bankrupt and Patanjali Ayurveda acquired it via the NCLT-led insolvency process in 2019. They paid banks Rs 4,350 crores for the company in late 2019. (Interestingly, Patanjali borrowed Rs 4,000 crores from the same banks to pay for the deal!)

Soon after this acquisition, the stock price of Ruchi Soya started going up. Virtually 5% every day (which was the daily limit). And this continued for quite a long time.

In fact, even when the pandemic fear was at its peak in 2020 and the stock market was crashing, Ruchi Soya’s shares still kept going up and up and up.

The company’s market value went 90x from ~Rs 500 crores (when Baba Ji's Patanjali acquired it) to Rs 45,000 crores in June 2021. Right now, it’s around Rs 27k crores and they’ve decided to sell a small part of it to raise Rs 4,300 crores.

Patanjali owns 98% of the company, and as per SEBI rules they have to gradually bring this down to 75%.
So with this FPO, the promoters, ie Patanjali is trying to reduce its stake by 9%.
 

Tech

Funding Corner


Unicorn Pe Unicorn

Do you all remember one of our Panchacorns from last year – Ofbusiness. They've had a 'Sone pe Suhaga' type situation. One of their business arms has joined the unicorn club after raising a mega-round of funding.

Oxyzo Financial Services, the lending arm of OfBusiness has raised $200 million and is now valued at $1 billion.

OfBusiness's core business has been providing SMEs in the infra and manufacturing space with a tech-enabled platform to procure raw materials. The reason these SMEs keep returning to OfBusiness is that their technology helps the SMEs get better products at better prices, and also speeds up procurement.

But as you all know. Every company is a fintech company nowadays.
So OfBusiness thought why don't we try the Indian startup world's favourite L-word – Lending.

They have their own non-banking financial company (NBFC) licence for this.
What they do is that based on the data they have they started providing cash flow and working capital financing for suppliers of OfBusiness. Now they've expanded that are lending businesses in other sectors as well.

Apparently, they're now up to $350 million in Assets Under Management with gross NPAs of 1.2%. Also, they're also already profitable just like their parent company.

Now post this round of funding Oxyzo will be spun out as a completely different company in which OfBusiness will hold a 70-80% stake.

Honestly, considering now lending arms are now becoming unicorns maybe we should stop joking about every startup adding lending and maybe we should also add a lending product.
Do any of you guys want loans?

Tech

A Beautiful Raise


The D2C beauty brand Plum has gone on to raise $35 million.

Plum claims to be a 100% vegan beauty brand and offers skincare, cosmetics, body, and bath products.
They claim to have an annual run rate of over Rs 225 cr.

Nykaa, is one of their biggest channels online. They also have a significant offline component with close to 40% of their sales coming from offline retail stores They operate in 250 towns and cities here in India!

WIth the money from this round of funding they plan on investing in the usual stuff - More R&D, more stores and more marketing.


The beauty market is expected to be worth $23 billion by 2022. And it looks like we will have plenty of our very own Indian beauty brands coming up and gaining significant market share.

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