The case of Ruchi Soya gets curioser. Baba Ramdev acquired Ruchi Soya with just 1100 Crores of own funds after banks wrote-off Rs. 5300 crores and further loaned Rs.3250 crores against a pledge of the same shares to complete the acquisition.
Having cost the banks, the next likely victims can be small investors. Ruchi Soya has filed a DRHP for an FPO to dilute its holdings. The pricing of the FPO is to be discovered by the market.
Here is where the trouble begins. To curb price volatality and manipulation, Sebi mandates that companies emerging from insolvency proceedings (CIRP) must have at least a 5% upfront public shareholding.
1. The public shareholding of Ruchi Soya is less than 1%. However, SEBI has allowed trading of the stock. With little float, the price has shot up from Rs.3.5 to now Rs.1193 in an year.
2. While promoters hold about 99%, almost 99.97% of that is pledged with banks. This was for the loans banks gave to fund the acquisition.
3. The average trading in the the last 3 months for the stock is 3% of the free float. ie. 0.03% of the total equity.
4. For a company with a market cap of 35,300 Crores, the average trading value over the last 3 months is a measly Rs.11 crores.
5. With such low trading, the price shot up from 642 on 1st April 2021 to 1193 today. All this will determine the price discovery for FPO.
6. The stock is hitting upper circuit on low volumes for the past couple of days with a traded value of about Rs.5 crores.
7. At the end of the FPO, Baba Ramdev will take money from small investors to repay the banks and own 90% of the company, with negligible own investment.
Why is SEBI allowing this charade to play out? Banks have always been complicit. Stock markets are cheer leaders. Small Investors and citizens of India will be the ultimate victims.

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More from @maheshperi

17 Jun
No talk of how Gujarati Businessmen benefit in India is complete without talking of Sandesaras of Sterling Biotech. With Adanis in the news for their unknown Mauritius investments, this becomes all the more important.
1. Sterling Biotech, A Gujarat based company promoted by Sandesaras owes Rs15,600 crore to Indian Banks.
2. The loans turn bad. In 2017, the entire family leaves India. They are now absconders from the Indian legal system.
3. Albania and Nigeria give them citizenship. Albania also makes them an honorary consul.
4. The bad loans reach insolvency proceedings where banks agree to a one time settlement (OTS) at 3100 Crores. That is 80% write off for banks.
Read 8 tweets
15 Jun
The Adani Group lost nearly ₹44,898 crore in market value on Monday as shares of group companies plunged. News of freezing of FPI accounts, a tweet by Sucheta Dalal and an explosive story by CNBC TV 18 all played a role.
1. The year also saw Gautam Adani becoming the second richest man in India as the market cap of his stocks went up from 2 lac crore to 9.5 lac crore. Surprisingly, the group firms have relatively low analyst coverage.
2. During the year, Adani Enterprises gained 741%, Adani Ports 100%, Adani Green 245%, Adani Transmission 650%, Adani Power 271% and Adani Total Gas 1,066%.
Read 9 tweets
13 Jun
The Prime Minister talked of Govt. supported vaccine research. There is also a rush and self congratulatory messages on IISc topping the QS charts. It is important to know how we supported our scientific community. Here is a report card:
1. The PM lied. In an affidavit in SC, the govt. said "It is submitted that no governmental aid, assistance or grant is made for research or development of either Covaxin or Covishield". This, despite Rs.900 Crores being allotted for vaccine research.
2. On IISc, a false narrative is being created with even the PM joining in. IISc topped on one parameter - Citation per Faculty. It just shows that we are squeezing more from our faculty. As a research institution, IISc is ranked 186.
Read 13 tweets
11 Jun
The Prime Minister made a national address where he announced FREE vaccination, and an repeated emphasis on FREE many times.

It is important to tell the emperor of what he has lost for us when he talks of how we gained because of his benevolence. Here is a lowdown:
1. The central government collected about 72,000 crores as oil tax in 2015. It would be about 360,000 crores in 2021. Currently, they collect 35,000 crores a month, just enough to give the entire population, both the jabs ON THE MONTHLY OIL TAX only.
2. The budget had already provided 35,000 crores for the vaccination. What was the FREE thing about when it is budgeted?

3. In the last 4 years, Banks were recapitalised to the tune of 2.86 lac crores thru budgetary allocation against write-offs owed by big industrialists.
Read 10 tweets
7 Jun
So, my thread on Ruchi Soya and Ramdev has caught a few by their knickers. For what is a perfectly legal acquisition on the surface, it is a complete sham.
With all the bullshit that the quack vomits on Blackmoney and nationalism, he has used the IBC process and our money to finance his racket and profiteered. Here are 10 questions:
1. This stinks. The banks term Ruchi Soya as a defaulter. They agree to settle for only 43.6% repayment. They fund the new acquirer. And they take the same defunct and defaulting Ruchi Soya shares as a collateral security? Can't get any stranger?
Read 10 tweets
6 Jun
Here is a story for future investigations to dig deep. People looking at Baba Ramdev through the prism of Patanjali are missing the forests for the trees. He is now playing through a listed company he bought in a sham of a transaction. Here is the story:
1. Ruchi Soya went into insolvency as many banks led by SBI made claims of Rs12,146 crores.

2. SBI had the highest exposure of Rs1,816 crore but agreed to settle it at 883 crores, thus writing off Rs.933 Crores in all. Other banks, including PNB, CBI etc. also took a haircut.
3. Having reduced the liabilities to less than half, only two bidders remained - Patanjali and Adani Wilmar.

4. In January 2019, Adanis having bid initially, withdrew, leaving only Patanjali in the race.
Read 8 tweets

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