Ruchi Soya acquires food retail business at Rs 690 crore

Edible oil manufacturer Ruchi Soya has announced the acquisition of the food retail business Acharya Balkrishna s Patanjali Ayurved at Rs 690 crore, in keeping with its prospectus on the follow-on public offer FPO with capital markets regulator SEBI.

The acquisition will take place in three tranches. 15 per cent of the total purchase consideration or Rs 103.50 crore will be paid in the first tranche, which is equivalent to a business transfer agreement BTA or within three days of the execution of the BTA.

42.5 per cent of the total purchase consideration or Rs 293.25 crore will be paid on the closing date. In the third tranche, 42.5 per cent of the total purchase consideration or Rs 293.25 crore will be paid within 90 days of the closing date.

Patanjali Ayurved's food business comprises 21 major products, including Ghee, Spices, Juices, Honey, Atta, etc. The turnover of Patanjali Ayurved for the year ended March 31, 2022 was around Rs 10,605 crore.

As part of the proposed acquisition, PatanjalI Ayurved promoter and chairman Acharya Balkrishna will hold 98.5 percent of the equity of Patanjali Ayurved. According to Ruchi Soya s exchange filing on May 18, Ram Bharat, the Managing Director and Promoter of Ruchi Soya will be the Director at Patanjali Ayurved.

The acquisition of the food retail business undertaking on a slump sale basis will result in expansion of the existing product portfolio of the Company, according to the filing. With this acquisition the company has reaffirmed its position to be a strong FMCG company in its journey towards becoming a major player in the FMCG space, as committed to its shareholders at the time of its maiden FPO. The board of directors of Patanjali Foods Limited approved the transfer of food retail business to Ruchi Soya Industries at a meeting on May 9. Ruchi Soya will have manufacturing plants located in Haridwar s Padartha and Maharashtra s Newasa.

The Office of Registrar of Companies under the Ministry of Corporate Affairs also approved the change in the name of the company from Ruchi Soya Industries Limited to Patanjali Foods Limited.

It added that it must be taken care that the proposed name cannot be made available for a period exceeding 60 days from the date of approval, and this approval does not grant any kind of privilege. The name is liable to be withdrawn at any time before the approval of the name change, if it is found later that the name shouldn't have been allowed. The board of directors at Ruchi Soya decided to change the company name to Patanjali Foods on April 11. Baba Ramdev said that we are making sure there is no overlap between the different businesses of the group. There is a non-compete agreement between the group firms. He said this will help Patanjali become the largest consumer goods company in the next few years and will help boost business.