Shares of Patanjali-acquired Ruchi Soya surged over 3% in early deals on Monday on BSE ₹1,070 per share after the government announced reduction in basic import duty crude palm oil, soy oil and sunflower oil as the world’s largest buyer of vegetable oil tries to pacify the rise in record prices.
Ruchi Soya is one of the largest manufacturers of edible oil in India. Rahul Sharma, Co-Founder, Equity99 said, “..In the month of August the company plans to start palm oil plantations in Assam, Tripura and other north-eastern states. The company is currently focusing on edible oil. As can be seen from Ramdev’s statement of making India self-sufficient in edible oil. ₹4,300 crore Follow-on Public Offer (FPO).
“On the technical chart, the stock is trading sideways after a major rally, on the weekly chart, it has been under the range of 1150 -1000, if the momentum continues and it breaks this consolidated range, then the stock has potential. Reach blue sky zone again, this range breakout could take the stock towards 1350-1400 levels,” Sharma said.
Patanjali had in 2019 acquired the erstwhile bankrupt firm known for its Nutrella brand of products ₹4,350 crore through the Insolvency and Bankruptcy Code (IBC) process. The shares of Ruchi Soya got listed on the exchanges on 27 January 2020.
The government in a notification late Friday said that the base import tax on crude palm oil has been reduced from 10% to 2.5%, while the tax on crude soya oil and crude sunflower oil has been reduced from 7.5% to 2.5%. Base import tax on refined grades of palm oil, soya oil and sunflower oil has been reduced from 37.5% to 32.5%.
India meets more than two-thirds of its edible oil demand through imports. The country imports palm oil mainly from top producers Indonesia and Malaysia, while other oils, such as soy and sunflower, come from Argentina, Brazil, Ukraine and Russia.
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