Ruchi Soya will be renamed Patanjali Foods as it acquires the food retail businesses of the parent company Patanjali Ayurved, the company informed the exchanges on May 18.
The company held a board meeting to seek the approval of its directors for the transfer.
“The board of directors have approved the Business Transfer Agreement (BTA) with Patanjali Ayurved Limited (PAL) to acquire the food retail business undertaking of PAL, which consists of packaging, labelling, manufacturing and retail trading of certain food products along with manufacturing plants located at Padartha, Haridwar and Newasa, Maharashtra (“Foods Business Undertaking”), as a going concern on a slump sale basis subject to the approval of shareholders and other authorities as may be required,” the company said.
Patanjali Ayurved acquired Ruchi Soya under the Insolvency and Bankruptcy Code proceedings in 2019 for Rs 4,350 crore. 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 percent) used for repayment of Ruchi Soya’s debt.
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 interaction with Moneycontrol in March 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 said.
According to Ramdev, Patanjali Ayurved’s food portfolio has a turnover of Rs 5000 crore and currently is on track to clock Rs 10,000 crore in the next two-three years.
Discussing the strategy for the merged entity, he had said that the company is building a portfolio to target masses as well as the premium consumer. The company’s focus area going ahead will be its ‘traditional oil business' as well as new categories such as nutraceuticals.
“From next year onwards, you will see all these categories contributing a large share to Ruchi Soya’s business. We will see the contribution of nutraceuticals and food grow and the results of palm plantation will show in the next three-five years,” he said.
Ruchi Soya, known for its brands Nutrela, has already introduced nutraceuticals and wellness products in the market.
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