Patanjali, India’s fast moving consumer goods (FMCG) company founded by Baba Ramdev denied reports suggesting that it placed a bid to acquire debt-ridden edible oil maker Ruchi Soya Industries for Rs 9,000 crore.
A spokesperson for the company SK Tijarawala wrote in a tweet, “The news of applying a bid of 9,000 crore rupees by Patanjali is wrong. We are evaluating. We understand the value of money of the common people of this country.”
However, SK Tijarawala did not deny Patanjali’s interest in acquiring the firm, but for a lesser price.
“After examining the company’s vitals and balance sheet, the value of the deal should be at most between Rs 1,800-2,000 crore,” he said.
He also describes the acquisition as synergistic with Patanjali’s values since it was “swadeshi. Vital resources should be fully utilized and channelized for the benefit of consumers and farmers.”
Ruchi Soya is India’s largest manufacturer of edible oil, and also boasts a huge portfolio of products that includes Nutrela, Mahakosh, Sunrich Ruchi Gold and Ruchi Star. It is also India’s biggest edible oil seed extraction and refining company and the leading company in cooking oil and soya foods market segment.
However, the company is currently owing debts of about Rs 12,000 crore as of December 31, 2017, and lenders dragged the company to the National Company Law Tribunal (NCLT) last year following which the company had over Rs 4,000 crore of bad debts written off and a net worth deficit amounting Rs 498 crore. Following reports that the company received a 9,000 crore bid from Patanjali, its shares climbed over five percent on the National Stock Exchange on Tuesday
Other than Baba Ramdev’s firm, several companies are keen on acquiring Ruchi Soya, such as Godrej Agrovet Ltd which is willing to buy Ruchi Soya’s palm oil business only and could partner with other companies willing to buy Ruchi Soya’s other businesses. Malaysian company Sime Darby Plantation, the world’s largest oil palm planter according to land holdings also showed interest in acquiring Ruchi Soya. Reports suggest that over 20 companies are tempted to acquire the Indian edible oil company, notably Emami, ITC, Aion Capital Partners and global investment firm Kohlberg Kravis Roberts.