led by baba ramdev Patanjali Ayurved Ltd. will sell its food retail business to a group firm Ruchi Soya Industries Limited for ₹690 crore as part of its strategy to focus on non-food, traditional medicine and wellness business.
Patanjali Ayurved Limited had acquired Ruchi Soya through insolvency process.
In a regulatory filing, Ruchi Soya informed that it has entered into a “Business Transfer Agreement” with Patanjali Ayurved Ltd. to make the latter’s food retail business a going concern based on slowing sales.
The food retail business includes manufacturing, packaging labeling and retail trading of certain food products as well as manufacturing plants located at Padarth, Haridwar and Nevasa, Maharashtra.
The transactions will include employees, assets (excluding Patanjali’s brands, trademarks, designs and copyrights), current assets (excluding debtors, vehicles, cash and bank balances), contracts, licenses and permits, distribution networks, customers related to food . Retail Business of Patanjali Ayurved.
The proposed acquisition is a related party transaction.
The amount of consideration for acquisition agreed under the agreement is ₹690 crores subject to certain adjustments.
The Board also approved change of name of the company from ‘Ruchi Soya Industries Limited’ to ‘Patanjali Foods Limited’.
Last month, Ruchi Soya Industries said it would evaluate the most efficient mode of merging Patanjali Ayurved Ltd’s food portfolio with its own and has also decided to rename the company as Patanjali Foods Ltd.
Ruchi Soya recently raised ₹4,300 crore through its follow-on public offering (FPO).,
A few months back, Baba Ramdev had announced, “In the next few months, Patanjali Ayurved will transfer all the food business to Ruchi Soya. Patanjali Ayurved will work in the non-food, traditional medicine and wellness space.
Baba Ramdev had said that Ruchi Soya would focus on four business segments – edible oils, edible and FMCG, nutraceuticals and palm oil plantations.
Last year, Patanjali transferred its biscuit business to Ruchi Soya for a nominal consideration of Rs 60 crore.
Baba Ramdev had said, “We have set a target of making Patanjali Ayurved and Ruchi Soya India’s largest food and FMCG company in the next five years.
He claimed that Patanjali Ayurved is the second largest food and FMCG firm in the country, with Hindustan Unilever Limited (HUL) being the first.
The combined annual turnover of Patanjali Ayurved Group and its subsidiary Ruchi Soya is around ₹35,000 crore.
Ruchi Soya, which was acquired by Patanjali Group in 2019 through an insolvency process for ₹4,350 crore, had revenue of around ₹16,400 crore in FY21.