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Ramdev-led Patanjali Ayurved has acquired Ruchi Soya’s food business on a slump sale basis. The acquisition is to evaluate the most efficient mode of enhancing synergies with its food portfolio.
Ruchi Soya To Be Renamed Patanjali Foods Company Board
The board of Ruchi Soya Industries has approved renaming the company as Patanjali Foods. This move will help the company to strengthen its presence in the FMCG market and boost revenue. The rebranding is expected to result in improved brand positioning and a larger customer base, leading to long-term benefits for the shareholders of the company. The stock of the company rallied by 10% after the announcement, indicating investor confidence in the new branding and potential for increased revenues.
Yoga Guru Ramdev’s Patanjali Ayurved acquired Ruchi Soya Industries in 2019 for Rs 4,350 crore. The company had been undergoing insolvency proceedings for some time prior to the acquisition. The company has repaid the debt of around Rs 2,925 crore to lenders and is now debt-free.
The company will now have to invest in the development of new products and increase its production capacity. The company is also focusing on organic food products, which will help to drive growth in the FMCG market. In addition, the company is looking to expand its presence in international markets. The company has recently partnered with Swiss retail giant Nestle to launch its products in the US and Europe.
Currently, the company has 21 major products in its portfolio including cow ghee, edible oils and other staples. The company has a revenue base of Rs 4,100 crore plus and has been growing at 15-20% year on year for the last several years.
As per the filing, the acquisition of Patanjali’s food business will include its fixed assets and current assets on a slump sale basis. The acquisition will also include manufacturing plants located at Padartha, Haridwar and Newasa in Maharashtra as well as employees and distribution networks.
The acquisition of Patanjali’s food retail business is part of a plan to make the company one of the top 10 FMCG companies in India. Baba Ramdev’s Patanjali brand has earned a good reputation in the Indian market and is known for its focus on natural and Ayurvedic products. The acquisition of Ruchi Soya will help the company to become more dominant in the edible oil and soya foods markets.
Patanjali Ayurved’s Food Business To Be Acquired By Ruchi Soya
The Board of Directors of Ruchi Soya has approved the acquisition of food business of Patanjali Ayurved Ltd. This is valued at a fair market value (net) of Rs 690 crore based on all the fixed assets of food division and respective current assets on a slump sale basis, according to a company statement.
The acquired business includes manufacturing plants at Padartha, Haridwar and Newasa, Maharashtra. It also includes the distribution network, contracts and licences and consumers associated with the business. It is a debt-free transaction and will be paid for using internal accruals, the company said. The acquisition is part of the plan to build a strong FMCG company that was committed to investors at the time of Ruchi Soya’s maiden follow-on public offer.
The company operates through the following segments: Extractions, Vanaspati, Oils, and Food Products. The Extraction segment produces a range of edible oils and vanaspati. The Oils segment provides refined and crude cooking oils. The Food Products segment offers ghee, soya flour, and other soya-based food items. The Wind Power Generation segment generates electricity through wind mills. The Company also offers a range of organic fertilizers and agro-based value-added products.
In addition to the aforementioned businesses, the Company offers other agricultural products, including tuar, mustard seeds, and soapnuts. It also manufactures a variety of consumer goods, such as detergents, shampoos, and soaps. The Company’s product portfolio also includes sanitary napkins, utensils, and leather goods.
The Company has a dedicated team of professionals that works with the vision to make it one of the most respected companies in India. Its leadership team has extensive knowledge and experience in various sectors, including agriculture, technology, and financial services. Its management team is focused on building a culture of excellence and accountability. It has a deep understanding of the needs of its employees and customers and is always looking for ways to improve efficiency. In addition, the company has a strong risk-management culture and is constantly seeking opportunities to improve profitability. These initiatives are helping the Company achieve its goals and grow further.
Ruchi Soya’s Board Meeting On 10th April
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Ruchi Soya’s board has accorded its in-principle approval for evaluating the most efficient mode to enhance synergies with Patanjali Ayurved Ltd’s food portfolio in any manner on an arm’s length basis. The board has also approved granting authority to officials of the company to negotiate, finalise and execute the terms and conditions of the proposed transaction.
Ramdev-led Patanjali group’s Ruchi Soya Industries will acquire the entire food retail business of Patanjali Ayurved Limited (PAL) on a slump sale basis for Rs 690 crore, the company said in a regulatory filing. The acquisition will strengthen the company’s product portfolio and increase its revenue and EBIDTA.
The company’s board will consider the proposal to change the name of the firm to ‘Patanjali Foods Limited’ in its meeting scheduled to be held on 10 April. The Board will also evaluate the performance of the Board, individual Directors and Committees on the basis of criteria set by Securities and Exchange Board of India.
In a separate development, the market regulator Sebi asked the bankers of the company to give investors an option to withdraw their bids in the FPO, which closed on March 28. The FPO was oversubscribed 3.6 times. The share sale was aimed at complying with the minimum public shareholding norm of 25%.
The company’s products include cooking oils, ghee, milk, packaged foods and nutraceuticals. Its brands include Ruchi Gold, Mahakosh, Sunrich, Nutrela and Ruchi Star. It is also into oil palm plantations and renewable wind energy business. It is one of the largest branded edible oil packaged food companies in India. The company has a pan-India presence with more than 1,500 outlets across the country. It is headquartered in Mumbai, India.
Ruchi Soya’s Food Business To Be Acquired For Rs 690 Crore
Baba Ramdev-led Patanjali Ayurved Ltd will sell its food retail business to group firm Ruchi Soya Industries Ltd for Rs 690 crore. This deal will strengthen the edible oil company’s product portfolio, as well as contribute to its revenue and EBIDTA growth, the firm said. The acquisition of the food business will include manufacturing, packaging, labelling and retail trading of certain products as well as manufacturing plants at Padartha, Haridwar, and Newasa in Maharashtra. The acquisition will also involve transfer of employees, assets, contracts, licences and permits, distribution network and consumers associated with the food business, the firm said.
The acquisition is a part of the company’s strategy to be a strong FMCG player, as committed to shareholders at the time of its follow-on public offer (FPO), the firm said in a statement. The acquisition of the food business will allow the company to enhance its market share in the fast-moving consumer goods category and accelerate the growth in this space, the company added.
It is a cash-free, debt-neutral transaction and will be funded from internal accruals, the company said in a statement. It will be a part of the food and allied businesses division of the company, which is expected to grow at 2-3 times the industry growth in terms of revenue and EBITDA, the firm said.
With the addition of the food business, the company’s total revenue will increase to Rs 22,000 crore, it will have a 20 per cent share in the edible oil sector, and 80 per cent in the food and FMCG sector, according to Asthana. He added that the acquisition will speed up the company’s shift to the FMCG sector and will double its revenue within five years, including that from the old commodity business.
The news of the acquisition was greeted by investors, with the stock of the company rising 5.15 per cent to close at Rs 971 on the NSE. It is one of the few stocks to have seen such a move in recent times. Investors are hopeful that the deal will accelerate the growth of the company, given that it is one of the leading players in the edible oil segment and will help it compete with bigger rivals such as Hindustan Unilever.
