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Ramdev-led Ruchi Soya Industries Ltd will acquire Patanjali Ayurved Ltd’s food retail business on a slump sale basis. The acquisition will boost the latter’s product portfolio.
Ruchi Soya To Be Renamed Patanjali Foods Company Board
Ruchi Soya Industries, a company specializing in the manufacturing of edible oils and soya foods, has announced that it will be renaming itself to Patanjali Foods Company. This move is expected to increase brand recognition and customer loyalty. In addition, it will help the company to create a more unified brand identity and gain an edge over competitors. The stock surged 10% on the news of the name change, indicating investor confidence in the company’s future growth potential.
In a recent filing with the BSE, the company said that it will be acquiring the entire food business of Patanjali Ayurved. The acquired business will include 21 major products such as ghee, honey, spices, juices, and atta. The acquisition will also include the transfer of Patanjali Ayurved’s manufacturing units located in Padartha district, Haridwar in Uttarakhand, and Newasa in Maharashtra. The acquisition will be done on a slump sale basis and is valued at a fair market value of Rs 690 crore, according to the filing.
The announcement was made after the Board of Ruchi Soya approved the proposal to acquire the food retail business of Patanjali Ayurved. This deal will enable the company to accelerate its transition into a leading FMCG company. Moreover, it will allow the company to focus on its non-food and traditional medicine business. The acquisition will also reduce the burden on the debt-laden Ruchi Soya.
Patanjali Ayurved is an Indian consumer goods company founded by Baba Ramdev and Acharya Balkrishna. It is known for its focus on natural products and ayurvedic medicine. In recent years, the company has expanded its product line to include a variety of foods and beverages. The company has become a dominant player in the health-food sector and has gained a loyal following among consumers.
In order to expand its business, the company has been investing in infrastructure and hiring talent. Its latest investment, a production facility in Amritsar, will allow it to produce and distribute more ayurvedic medicines and other natural products. This investment is in addition to its existing facilities in Pune and Nashik. Moreover, the company recently raised Rs 4,300 crore through a follow-on public offering (FPO). These funds will be used to finance its expansion plans and to improve its financial position. The company hopes to become debt-free by 2022. It is also working to increase its presence in the global markets and expand its footprint in Asia. This will help it to compete with the likes of Unilever and Nestle, which have a strong presence in India’s fast-moving consumer goods industry. However, the company will face challenges in competition, marketing, and supply chain management. These challenges can be overcome through effective planning and execution. The company can capitalize on its strengths in innovation, marketing, and distribution to drive long-term growth.
Patanjali Ayurved To Sell Food Retail Business To Ruchi Soya
The Indian multinational company Ruchi Soya has agreed to buy Patanjali Ayurved’s food retail business. The purchase will be completed by July 15. It will include 21 major products, including ghee, honey, spices, juices, and atta. This will accelerate Ruchi Soya’s transition into a leading FMCG company. The acquisition will also include the transfer of employees and distribution networks. Baba Ramdev’s Patanjali Group acquired the company in 2019.
In a regulatory filing, Ruchi Soya said it has signed a “Business Transfer Agreement” with Patanjali Ayurved Limited (PAL). The deal entails the transfer of PAL’s food retail business. This includes manufacturing, packaging, labelling, and retail trading of certain food products along with manufacturing plants located at Padartha district in Uttarakhand and Newasa in Maharashtra. The transaction is valued at Rs 690 crore on a slump sale basis.
According to the business news website, Newslaundry, the move is part of the company’s plans to become a national player in the FMCG market. It has also reportedly taken control of Dalit lands for cow shelters and herb farms in Teliwala village in Uttarakhand. This has resulted in the displacement of more than 4,000 people. The company has been accused of using force and circumvention of laws. It has also been accused of removing people from their homes for no apparent reason.
The acquisition will help Ruchi Soya diversify its product offerings and enhance synergies with its parent, Patanjali. It is expected to increase the company’s revenue by about 18%. The acquisition will also allow it to focus on non-food, traditional medicine, and wellness businesses. In April, the company had said that it would evaluate the most efficient mode to combine Patanjali’s food portfolio with its own.
Ruchi Soya Industries is an India-based company that manufactures and sells edible oils, vanaspati, bakery fats, and soya chunks. The company also exports agricultural commodities such as raw cotton. Its customers include branded and unbranded retailers, wholesalers, and distributors. It is one of the largest producers of edible oil in India. The company has operations in India and the Philippines.
The company is currently working on developing a blockchain-based system for tracking the supply chain of its products. This will allow it to monitor its entire production process, from seeding to packaging. It will also enable it to track the progress of its products and ensure that they are delivered on time. The project is being funded by the government of Gujarat and will be implemented in 2024. The company has also partnered with VeChain to develop the technology. This partnership will provide an opportunity for the two companies to work together and create a system that is secure, reliable, and scalable. In addition, it will reduce the need for human intervention. This will lead to greater efficiency and cost savings.
Ruchi Soya Industries To Evaluate The Most Efficient Mode Of Enhancing Synergies With Patanjali Ayurved
The board of Ruchi Soya Industries Ltd, which was acquired by Patanjali Ayurved in 2019 for Rs 4,350 crore through an insolvency process, will evaluate the most efficient mode for enhancing synergies with the latter. The company will also evaluate the most efficient way to make its food portfolio stronger and increase EBIDTA, it said in a filing with the exchanges.
Currently, the company manufactures and sells cooking oil, soya foods, bakery fats, vanaspati products, among others. Its revenue stood at 242 billion Indian rupees in the financial year 2022. One Indian rupee is equal to 0.011 U.S. dollars and 0.012 euros (as of April 25, 2023).
Patanjali Ayurved will transfer its food retail business to Ruchi Soya on a slump sale basis for about Rs 690 crore. This will help the company focus on its non-food, traditional medicine and wellness businesses.
Last week, the company said it had repaid loans worth Rs 2,925 crore to banks and has become a debt-free firm. It recently raised Rs 4,300 crore via a follow-on public offer, and a part of the proceeds were used to repay its loans.
Ruchi Soya’s board has approved the in-principle approval for evaluating the most efficient mode of enhancing synergies with Patanjali Ayurved Limited on an arm’s length basis, it said in a regulatory filing. It has authorised officials of the company to negotiate, finalise and execute the terms and conditions of the proposed transaction. It may include the transfer of PAL’s food portfolio that includes whole wheat traditional chakki atta, pulses and others, aloevera juice, amla juice, medicinal juices, fruits and beverages, candy, murabba and pickle, spices, rice bran oil, mustard oil, cow ghee and other foods.
The company is currently the largest manufacturer of edible oils in India, having a market share of about 32 per cent. It is also the largest producer of vanaspati and soya foods, with a combined capacity of over 2.8 million tonnes. Its products are sold in over 150,000 outlets across the country.
Its revenue in the financial year 2022 was about 242 billion Indian rupees, and it had an EBIDTA of about Rs 16.318 billion. However, the stock has lost about 48% in the past year due to soaring crude oil prices and loss of supply from Ukraine and Russia, which account for about 90% of India’s sunflower oil imports. The company was also facing the challenge of a slowdown in rural demand. Nevertheless, the company is expected to recover in the near term. Its sales in the current financial year are on track to surpass last fiscal’s sales, and the board has set a target of increasing its revenues by more than 15 percent this year. The company will invest in new projects to achieve its growth targets, it added