Ruchi Soya said the board has decided to change the company’s name from “Ruchi Soya Industries Limited” to “Patanjalic Foods Limited” subject to legal and regulatory approvals. “Business Transfer Agreement (“BTA”) with Patanjali Ayurved Limited (“PAL”) to; to acquire PAL’s food retail business, which consists of manufacturing, packaging, labeling and retailing of certain food products, along with factories in Padartha, Haridwar and Newasa, Maharashtra (“Food Retail Business Undertaking”), as a continuity of business in a slump base of sale subject to shareholder approval,” the regulatory filing said.
The company said in a filing that it will acquire the food retail business of Patanjali Ayurved Limited. Shares of Ruchi Soya rose 7.84 percent in afternoon trading at Rs 1,168.70.
“The transaction will consist of the transfer of employees, assets (excluding Patanjali’s brand, trademarks, designs and copyrights), current assets (excluding accounts receivable, 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 request.
Patanjali Ayurved had announced plans to transfer all food business to Ruchi Soya before disbanding its FPO. The company’s founder, yoga guru Baba Ramdev, had discussed plans in a previous interaction with Moneycontrol 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 best FMCG company in the food and FMCG sector based on its offerings, so we decided to transfer the entire food portfolio to Ruchi Soya. Our food portfolio has a very strong brand equity and sells based on brand trust. We sell popular products like chyawanprash, medicinal juices, etc,” Ramdev had told Moneycontrol.
Ruchi Soya is recognized as one of the largest branded oil-packed food products. The ‘Ruchi Gold’ brand has a market leadership position as it is India’s top selling palm oil brand and also the pioneers and largest producers of soy foods in India under the ‘Nutrela’ brand.
The company is recognized as one of the largest branded packaged food products with a strong portfolio of brands in different types of cooking oils in categories such as Palm, Soybean, Mustard, Sunflower, Cottonseed etc. with a robust brand portfolio of “Ruchi Gold”, “Mahakosh” , “Sunrich”, Ruchi Star and Ruchi Sunlight.
Ruchi Soya was bought by Patanjali Ayurved in 2019 for Rs 4,350 crore under an insolvency process. In December 2017, the National Company Law Tribunal (NCLT) ordered insolvency proceedings against Ruchi Soya at the request of Standard Chartered Bank and DBS Bank. As of March 31, Patanjai Ayurved owned a 39.37 percent stake in Ruchi Soya. Acharya Balkrishna, one of the promoters and chairman of Ruchi Soya, owns 98.5 percent of the paid-up share capital of Patanjali Ayurved.
The company followed up on a public offer (FPO) by Ruchi Soya earlier this year to raise Rs 4,300 crore. Most of the proceeds from the FPO (80-85 percent) will be used to repay Ruchi Soya’s debt.
Read all the latest news, breaking news and IPL 2022 Live Updates here.