Tuesday, May 24, 2022

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    Ruchi Soya-All about the stock that went from Rs 21 to Rs 1500 in four months!

    Ruchi Soya is one of the top FMCG (Fast-Moving Consumer Goods) companies in India. They work on processing crude palm oil to convert it into refined oil.

    The renowned brands Nutrela, Sunrich, and Mahakosh are the products of Ruchi Soya.

    So, what was the reason behind Ruchi Soya’s recent success?

    The story goes way back to 2011 when Indonesia raised the export prices on crude palm oil. This affected Ruchi Soya directly as they imported most of their raw materials from Indonesia. Moreover, Indonesia also canceled export costs on refined edible oil that drove manufacturers to directly import refined oil from Indonesia instead of buying from Ruchi Soya.

    Consequently, Ruchi Soya had no choice but to compete with cheap imports by bearing brunt of the burden themselves. In 2017, due to severe bankruptcy, Ruchi Soya was sold to another FMCG company, Patanjali. This failed big time because Patanjali could not keep any collateral for the loan they took to buy Ruchi Soya. Hence, they decided to list the company on the stock market in January 2020.

    Ruchi Soya shares began trading at Rs 16.5. Starting with low expectations, Ruchi Soya eventually grew spectacularly with a stock price that rallied by a whopping 9100%. Reports from two weeks ago showed that Ruchi Soya, which was once sold for Rs 9000 crore to Patanjali is now worth 44,700 crores!

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