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Ramdev-led Ruchi Soya Industries Ltd will acquire Patanjali Ayurved Ltd’s food business on a slump sale basis for Rs 690 crore. The acquisition will include transfer of employees, assets (excluding trademarks, designs and copyrights), current assets and contracts.
Ruchi Soya To Be Renamed Patanjali Foods Company Board
The renaming of Ruchi Soya as Patanjali Foods Company will increase the brand recognition and recall value for both companies. This will help them in attracting more consumers, thus leading to increased revenue. It is also expected to help the company in diversifying its product portfolio. This will also boost organic food demand, which is a growing trend in the Indian market.
The stock of the company surged after the announcement, indicating investor confidence in the rebranding. It is expected to provide long-term benefits for the shareholders of both companies. The renaming of the company is a result of Yoga Guru Ramdev’s acquisition of Ruchi Soya Industries. The new name will allow the company to strengthen its position in the FMCG sector, which will boost growth in the future.
In a move to enhance synergies, the company’s board has approved changing its name to Patanjali Foods Company Limited. The new name will be registered with the Registrar of Companies. This will be done to ensure a smooth transition for the company. The company’s board has also approved a business transfer agreement with Baba Ramdev-led Patanjali Ayurved Ltd to acquire its food retail business for Rs 690 crore. The food retail business includes manufacturing, packaging and labelling of certain products, as well as distribution networks. The acquisition will be completed by July 15, 2022.
The acquisition will enable the company to diversify its portfolio of products and expand its presence in the Indian market. It will also enable the company to benefit from Patanjali’s strong distribution network and customer base. Moreover, the company’s expertise in manufacturing will be instrumental in developing distinctive products that can compete with existing offerings. This will ensure the company’s future growth and profitability. The rebranding will also help the company to improve its brand image in the country. The company will now be able to attract more customers and increase its market share. The company is set to become a leader in the FMCG industry with its strength in innovation, health and wellness, and distribution. It will benefit from its strong balance sheet and will be able to achieve its expansion plans.
Patanjali Foods To Be Acquired By Ruchi Soya
Founder and Chairman of Patanjali, Baba Ramdev has set a target of making the company India’s largest food and FMCG firm in the next five years. In this regard, he has laid out a clear road map for the future of the business by focusing on four major areas – edible oil, food and FMCG, nutraceuticals and oil palm plantation.
Edible oil business is a core strength of the company and it is amongst the largest branded packaged cooking oils player in the country. Its flagship brand, Ruchi Gold, enjoys a leadership position in the market with robust brands like Mahakosh, Sunrich and Ruchi No.1. The company has 22 manufacturing units with a total refining capacity of more than 11000 tons per day and seed crushing capacity of more than 10000 tons per day.
The company is also a leading manufacturer of soya foods and has a large presence in the branded packaged foods segment with strong brands like Nutrela soya chunks, Nutrela soya granules, and High Protein Chakki Atta. In addition to these, the company offers a wide range of healthy snacks and namkeens under the Divya Samosas brand.
Recently, the company acquired the food retail business of Patanjali Ayurved Ltd for around Rs 690 crore on a slump sale basis. The deal is expected to accelerate the transformation of the company into a leading FMCG player in the country. It will also enable the company to strengthen its product portfolio and achieve synergies with the food business of Patanjali Ayurved Limited.
The name of the company will be changed to Patanjali Foods Limited subject to approval from shareholders and regulatory authorities. The company will also issue fresh share certificates with the new name. The shares will be listed on the BSE and NSE with effect from June 24, 2022.
Founded on January 6, 1986, the company is classified as Non-Government and is registered with the Registrar of Companies, Mumbai. Its authorized capital is Rs 9,530,500,100 and its paid-up capital is Rs 2,516,243,710. The company is inolved in Production, processing and preservation of meat fish fruit vegetables oils and fats.
Ruchi Soya To Repay Loans
The Baba Ramdev-led Ruchi Soya is now ‘debt free’, after the FMCG giant used part of the proceeds from its follow-on public offering (FPO) to pay off its debt. The company had raised Rs 4,300 crore via the FPO, which was launched in April. According to the draft red herring prospectus, the company was going to use some of the money from the FPO to repay debt, which totalled around Rs 2,925 crore, to a consortium of banks led by the State Bank of India. The other members in the consortium included Punjab National Bank, Allahabad Bank, and Syndicate Bank.
The debt repayment was facilitated by the government’s loan waive-off facility. As per the scheme, if a borrower is unable to pay off its loans due to natural disasters or other unforeseen circumstances, then the government can waive-off the debt and return the amount to the lender. This will prevent the company from having to default on its repayments and help it maintain its financial health in times of need.
As per the deal, the PAL business will be transferred to Ruchi Soya, including the brand name, intellectual property rights (including trademarks, designs, and copyright), current assets (excluding debtors, vehicles, cash, and bank balance) contracts, licenses and permits, and customers related to the food retail business of PAL. PAL’s employees will also be transferred to Ruchi Soya. The transaction is expected to be completed by July 2022.
In the wake of this news, shares of Ruchi Soya rallied on Monday morning and were trading up 8.3 percent at Rs 690 per share. The stock has risen after it became clear that the company would be able to repay its loans and merge with Patanjali Foods.
However, the subscription in the retail individual investor quota for the FPO has fallen to 0.23 times the number of shares on offer. Earlier, it was around 1.58 times. This has reduced the overall subscription rate for the FPO, and may have affected the share price rally. Nevertheless, the issue remains open for investors until Thursday. The price band for the FPO is set at Rs 615-Rs 650 per equity share.
Ruchi Soya To Rebrand
Ruchi Soya’s rebranding will help it benefit from the company’s extensive brand equity. It will also allow it to take advantage of Patanjali’s marketing prowess. In addition, the rebranding will enable the company to better compete with other FMCG companies.
The board of the renamed entity approved the merger and rebranding in early hours of trading on Monday, and will evaluate the best way to enhance synergies with Patanjali’s food portfolio. It also authorised officials to negotiate, finalise and conclude the terms and conditions of the deal.
According to reports, the company is expected to merge its entire food business with Patanjali Ayurved in the near future. This includes brands such as Ruchi Gold, Mahakosh, Sunrich, Nutrela, and more. The company also operates a chain of oil palm plantations and is involved in the renewable wind energy business.
In a bid to strengthen its position in the edible oil market, Ruchi Soya has decided to change its name to Patanjali Foods Company. This is a significant move for the company as it will help it gain a larger market share and strengthen its brand image. Additionally, it will increase the visibility of its products and attract new customers.
During the rebranding process, it is important to communicate clearly with existing customers and stakeholders. This will minimize confusion and maintain trust. In addition, it is necessary to create a clear plan for the transition and provide training to employees. This will ensure that the transition is as seamless as possible and will have a positive impact on both the business and its reputation.
The acquisition and rebranding of Ruchi Soya by Patanjali Foods will likely have some challenges and risks for both the companies. These risks include the impact on shareholders and the changes in the company’s organizational structure. Furthermore, the rebranding will require significant investment in marketing and ensuring a stable supply chain. The success of the rebranding will depend on how well the companies navigate these challenges and opportunities. However, the rebranding and acquisition will be a huge opportunity for both companies to become a dominant force in the Indian food industry.
