Ruchi Soya to Become Patanjali Foods After Biz Acquisition; Share Surges nearly 8%

Ruchi Soya said that its board has decided to change the name of the company from “Ruchi Soya Industries Limited” to “Patanjali Foods Limited” subject to statutory and regulatory approvals. “Business Transfer Agreement (“BTA”) with Patanjali Ayurved Limited (“PAL”) to ; acquire the food retail business undertaking of PAL which consists of manufacturing, packaging, labelling and retail trading of certain food products along with manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra (“Food Retail Business Undertaking”), as a going concern on a slump sale basis subject to approval of shareholders,” the regulatory filing said.

The company, in a filing, said that it will be taking over the food retail business of Patanjali Ayurved Limited. Shares of Ruchi Soya were up 7.84 per cent at Rs 1,168.70 in afternoon trade.

“The transaction shall consist of transfer of employees, assets (excluding Patanjali’s brand, trademarks, designs, and copyrights), current assets (excluding debtors, vehicles, cash, and bank balance) contracts, licenses and permits, distribution network, customers related to the Food Retail Business Undertaking of Patanjali Ayurved,” the company informed in an exchange filing.

Patanjali Ayurved had disclosed plans to transfer all food business to Ruchi Soya before floating its FPO. The company’s founder yoga guru Baba Ramdev in an earlier interaction with Moneycontrol had discussed plans to merge the food businesses of two entities and create a formidable player in the FMCG segment.

“It will be difficult to make Ruchi Soya the top FMCG company in the food and FMCG space based on its offerings, so we decided to transfer the entire food portfolio to Ruchi Soya. Our food portfolio has very strong brand equity and sells on the basis of brand trust. We house popular products such as chyawanprash, medicated juices, etc,” Ramdev had told Moneycontrol.

Ruchi Soya is recognized amongst the largest branded oil packaged food company. Its ‘Ruchi Gold’ brand has a market leadership position, on account of being India’s highest-selling palm oil brand and also the pioneers and largest manufacturers of soya foods in India under the brand name of “Nutrela’.

The Company is recognised amongst the largest branded oil packaged food company with a strong portfolio of brands in various types of cooking oils under categories such as palm, soybean, mustard, sunflower, cottonseed etc. with robust brands portfolio of “Ruchi Gold”, “Mahakosh”, “Sunrich”, Ruchi Star and Ruchi Sunlight.

Ruchi Soya was bought by Patanjali Ayurved for Rs 4,350 crore in the year 2019 under an insolvency process. In December 2017, the National Company Law Tribunal (NCLT) ordered start of insolvency proceedings against Ruchi Soya on application of Standard Chartered Bank and DBS Bank.  As of March 31, Patanjai Ayurved held a 39.37 per cent stake in Ruchi Soya. Acharya Balkrishna, one of the promoters and chairman of Ruchi Soya, holds 98.5 per cent of the paid up equity share capital of Patanjali Ayurved.

The company earlier this year floated follow on public offer (FPO) of Ruchi Soya to raise Rs 4,300 crore. The proceeds of the FPO will be mostly (80-85 per cent) used for repayment of Ruchi Soya’s debt.

Read all the Latest Business News here