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Baba Ramdev-led Patanjali Ayurved Ltd will acquire Ruchi Soya Industries Ltd’s food retail business for Rs 690 crore. The acquisition will include transfer of employees, assets (excluding brand, trademarks and designs), current assets, contracts and distribution network.
Ruchi Soya To Be Renamed Patanjali Foods Company Board
Patanjali Foods, formerly known as Ruchi Soya Industries Ltd, manufactures consumer packaged foods in India. The company primarily produces and markets edible oils, Vanaspati, and bakery fats. Its manufacturing facilities are strategically located to strike the proper balance between proximity to raw materials and market demand. It also has a large distribution network and a sales force in the country. The company also sells its byproducts, such as soy meal and lecithin, to other countries.
The acquisition of Ruchi Soya by Patanjali Ayurved will accelerate the latter’s transition to a leading FMCG firm in India. The deal will also include transferring employees and establishing new distribution networks. The acquisition will also allow Patanjali to increase its product portfolio and reach a wider customer base.
Moreover, the move will help attract health-conscious consumers who appreciate natural and organic products. This trend is expected to boost the edible oil market, which currently accounts for a substantial share of global consumption. Additionally, the acquisition will strengthen the company’s position in India’s highly competitive FMCG industry and boost its revenue and earnings.
In addition to its extensive range of products, Patanjali Ayurved is also known for its ayurvedic line. This move will likely attract health-conscious consumers, which will in turn boost the company’s growth.
The company has an experienced leadership and management team that possesses significant business expertise for the industry in which it operates. Its Board of Directors includes a mix of management executives and independent directors with decades of experience in the edible oils, palm plantations, and soya foods industries. The company has a number of partnerships with well-known international companies and organizations, including Adani and Wilmar.
The company’s current operations are focused on reducing expenses and increasing sales. The company’s management believes that this will help it become profitable in the long run and achieve its objectives of profitability and sustainability. It has already rebranded its packaging and changed the name of its factories to reflect these changes. In addition, it is implementing cost-cutting initiatives and boosting its production capacity. This will enable the company to compete more effectively with other industry leaders.
Patanjali Ayurved To Sell Its Food Retail Business To Ruchi Soya
Patanjali Ayurved Ltd has decided to sell its food retail business to Ruchi Soya Industries, a company owned by the Baba Ramdev-led group. The move is aimed at concentrating the company’s resources on non-food, traditional medicine and wellness businesses, the company said in a statement. The acquisition is valued at a fair market value (net) of Rs 690 crore, which includes all the fixed assets of the Food division and respective current assets on a slump sale basis, it added. The food retail business includes 21 major products such as ghee, honey, spices, juices and atta. It also includes manufacturing plants located at Padartha, Haridwar and Newasa in Maharashtra.
Ruchi Soya Industries is recognized amongst the largest branded oil packaged foods companies with a robust portfolio of oils in palm, mustard, sunflower and cottonseed categories. Its brand ‘Ruchi Gold’ enjoys a leadership position in the edible oil segment and has a dominant market share. It also has a strong portfolio of soya-based food products such as Nutrela, Mahakosh, Sunrich and Ruchi Star.
In addition, the Company operates a chain of retail stores under the name ‘Swaroop’ and caters to the grocery and convenience store chains across the country. It has a total of 23 distribution centres and a sales network that extends to over 4,500 outlets.
Earlier this year, the company raised over Rs 4,300 crore through a follow-on public offer to meet debt-repayment obligations. Currently, the company has a debt-to-equity ratio of 0.87.
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A multi-faceted and accomplished personality, Acharya Balkrishnaji is a renowned scholar of Ayurveda, Sanskrit language and the Vedas. He is also a successful entrepreneur, transforming his small business into a booming enterprise. He has a deep understanding of India’s ethos and culture and is dedicated to the service of humanity. He is the Founder Secretary of Patanjali Yogpeeth Trust and a multi-talented social and environmental activist.
Patanjali Ayurved To sell Its Biscuits Business To Ruchi Soya
Last year, yogic guru Baba Ramdev-helmed Patanjali Ayurved Ltd (PAL) had transferred its biscuits business to Ruchi Soya Industries (RSIL). The acquisition will make PAL one of the biggest players in the FMCG foods market and will pit it against rivals like Nestle, Britannia, ITC, and Hindustan Unilever Ltd (HUL). The move underscores the company’s ambitions to become India’s largest food and FMCG firm within five years.
RSIL had faced a crisis over the past few years, with high input costs and low margins pushing it into a debt spiral. A consortium of lenders dragged it into bankruptcy proceedings, and the company was eventually bought by Ramdev’s Patanjali Ayurved Group in 2017. As part of the deal, RSIL had agreed to sell its food retail business.
On Monday, the board of Ruchi Soya said that it will evaluate the best way to integrate the food portfolio of PAL into its own business. It also authorised its officials to negotiate, finalise and execute the terms of the sale. The transaction will include the transfer of employees, fixed assets, current assets including vehicles, stock and cash, and contracts. It will not include the distribution network, licenses and permits or other non-financial assets.
The company will pay Rs 690 crore for the acquisition, which will be on a slump sale basis. The acquisition will be funded through a combination of equity and debt. The purchase will accelerate the transition of RSIL into a leading fast-moving consumer goods (FMCG) company. The acquisition will also help the company improve operational efficiencies and eliminate competition between its various businesses.
In addition to the food retail business, the purchase will also include RSIL’s ghee, honey, spices, and juices business. The acquisition will help the company expand its presence in the north and east markets.
However, some market experts are skeptical of the deal’s prospects. They believe that the company is unlikely to attract large numbers of new investors to the stock market, and merely transferring its existing products under a different brand name will not help it capture the attention of the investor community. Besides, the stock has a very small float—around 98.9 per cent—and a little trading activity can dramatically affect the price of the share.
Patanjali Ayurved To Sell Its Edible Oil Business To Ruchi Soya
The move is expected to boost Patanjali’s presence in the Indian FMCG market. It will also help it leverage its existing infrastructure and distribution network. The rebranding could also lead to increased investor confidence and a higher share price.
The acquisition will accelerate Patanjali’s transition into a “leading” fast-moving consumer goods (FMCG) company, according to a regulatory filing by Ruchi Soya Industries Ltd. The transaction is being done on a slump sale basis and includes 21 major products including ghee, honey, spices, juices and atta.
It will also give Patanjali access to 24 plants, primarily for crushing, milling, refining and packaging edible oil. Moreover, it will give the company access to mass-market edible oil brands that are well established in the country. With a total capacity of over 6 lakh tonnes, the deal is a huge win for Patanjali, especially given the thin margins of the business.
Besides expanding its presence in the Indian food market, the move will also enable it to diversify its portfolio and increase its market share. It will also allow it to tap into the booming FMCG sector in India, which is expected to grow rapidly over the next decade.
The sale of the edible oil business will also allow the company to focus on its non-food, traditional medicine and wellness businesses. It will continue to expand its footprint in the domestic and international markets. The deal will also help the company reduce its debt and focus on growth strategies.
Yoga guru-turned businessman Baba Ramdev’s group will take over the entire ownership of the company, with an investment of around Rs 4,300 crore. It will also clear all the outstanding dues by the company in its bankruptcy proceedings. The existing shareholders will be wiped out in the process, as is typically the case in bankruptcy cases.
The acquisition will be made through a special purpose vehicle, which will be owned by the promoters of the company. It will be subject to requisite regulatory approvals. The board of the company has already approved the proposal. The company will also change its name to ‘Patanjali Foods’
