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Home>Blog>Stocks>SEBI Allows Investors To Withdraw Ruchi Soya FPO Bids: Here’s Why

SEBI Allows Investors To Withdraw Ruchi Soya FPO Bids: Here’s Why

06 April 2022
3 minutes

The share price of Ruchi Soya fell more than 19% in the first few hours of trading after Ruchi Soya FPO allotment.

The company’s board approved an allotment of 6.61 crore equity shares.

In March 2022, Securities and Exchange Board of India (SEBI) has given a directive on Ruchi Soya’s FPO (follow on public offer). As per SEBI’s statement, investors who had participated in Ruchi Soya’s Rs 4,300 crore FPO can withdraw their bids. 

Following the directive, the option has been opened on Groww, and users wishing to withdraw bids can do so in simple steps.  

FPO subscription  

Ruchi Soya, a part of the Patanjali Group, launched a Follow on Public Offer (FPO) that was initially open between March 24 and 28, 2022. 

Under usual circumstances, investors are allowed to cancel their IPO application during the bidding tenure. However, for Ruchi Soya, a special window has been allowed. And it is open until March 30, 2022 for investors who wish to withdraw their bids.

The FPO of Ruchi Soya was subscribed 3.60 times the reserved portion and Retail Individual Investors (RIIs) bid for the issue 0.90 times. 

Why was this necessary?

SEBI came out with this directive on Ruchi Soya due to Misleading SMSes.

During the FPO subscription period, there was a “circulation of unsolicited SMSes advertising the issue”, SEBI noted. 

As per various media reports, unsolicited messages were being sent to Patanjali Ayurved’s users to invest in the said offer.

The messages seen by media reports read: “Great news for all beloved members of Patanjali Parivar. A good investment opportunity in Patanjali Group. Patanjali Group company—Ruchi Soya Industries Ltd—has opened the follow-on public offer(FPO) for retail investors…..”

Action by SEBI 

SEBI mentioned that the content of the SMS appeared to be “misleading/fraudulent” and directed the lead banking managers to the FPO to issue a notice to all investors in the form of newspaper advertisements, cautioning them about the circulation of such messages.

SEBI directed Ruchi Soya to give the investors who participated in its FPO the option to withdraw their bids. 

An SMS has to be sent to all the applicants whose bids have been received, informing them about the additional window provided to withdraw their bids. 

Extended Dates

Following the actions, the FPO dates have been extended till March 30, 2022. This is only for accepting the withdrawal bids. The window for withdrawal will be available on March 28, March 29, and March 30, 2022. 

All investors/bidders (except anchor book participants) have been given an option to withdraw their bids on these dates.

If you wish to withdraw your bids, the option for the same has been opened on Groww. Go to the IPO section of the Groww app or website, click on Ruchi Soya FPO, and you will get an option to withdraw your bids if you had earlier applied for the offer.

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The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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