Patanjali in talks with state-run banks for Ruchi Soya acquisition

By

Isabelle Crossley

Published
May 30, 2019

The Ayurvedic fast moving consumer goods business Patanjali has approached a number of state-run banks to help fund its acquisition of Ruchi Soya.

Patanjali is in advanced talks with state-run banks including State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank, and Jammu & Kashmir Bank with the aim of raising funds to go towards its acquisition of Ruchi Soya, sources told ET Bureau.

The business is looking to raise debt with a maturity of five years and above for the acquisition which would greatly expand Patanjali’s production capacities. 

“The funding is in the final stages of negotiation and the interest rates will be finalised soon,” a source toile ET Bureau. “Patanjali had earlier approached several non-banking channels but it backtracked after these investors sought high level of disclosures.”

Patanjali is in talks to raise funds for its acquisition of the debt-ridden Ruchi Soya Industries for Rs 4,350 crore ($653.9 million). Sources stated that the business aims to raise over Rs 3,700 crore from the banks and will source Rs 600 crore through internal accruals for the deal. 

The acquisition will help Patanjali to maintain growth, which stagnated somewhat over the previous financial year. The FMCG brand has diversified rapidly from its initial offerings of Ayurvedic personal care items to include many other product categories. 

The brand is currently focused on expanding its apparel offerings and aims to open 500 Patanjali Paridhan clothing stores with a target revenue for the brand of Rs 1,000 crore by the next financial year. Patanjali Paridhan, which was launched in November last year, has three sub-brands: womenswear brand Aastha, unisex sportswear brand Livfit, and menswear brand Sanskar.