Thursday, December 26

Patanjali going to issue its first debentures, looking to raise $33 million

NEW DELHI, 27th May 2020: India’s leading natural product based FMCG company Patanjali Ayurved plans to issue $33 million (Rs 250 crore) debentures to meet its working capital requirements and strengthen supply chain network. 

This would be the first-ever issuance of debentures by the Haridwar-based firm, which has emerged as one of the leading companies in the FMCG segment in recent years.

The non-convertible debentures (NCDs) will carry a coupon rate of 10.10 per cent with a tenure of three years. The maturity date is May 28, 2023. According to information, the bidding date would start on May 28 for NCDs, which would be listed on the stock exchanges and are redeemable.

“In this pandemic, demand for Ayurveda-based products, which help in boosting immunity, along with other products has gone up by three-folds. That has put constraints in our supply chain, right from manufacturing to distribution. We are raising this (fund) to strengthen this one (supply chain) so that we can smoothen our process from manufacturing to distribution,” Patanjali spokesperson SK Tijarawala said.

The debenture has been rated as AA by Brickwork. Recently, several companies have announced plans to raise money from the market through debentures, as they are facing a liquidity crunch. Companies also need money to meet the costs involved in resuming their production capacity and augmenting their supply pipelines.

In December last year, the Haridwar-based group had completed the acquisition of bankrupt Ruchi Soya for Rs 4,350 crore, maker of soya food brand Nutrela through an insolvency process.

Patanjali won the bid to acquire Ruchi Soya after Adani Wilmar, which sells edible oil under the Fortune brand, withdrew from the race citing significant delays in the resolution process that led to the deterioration of assets.

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