NEW DELHI: Yoga guru Swami Ramdev has no plans to launch Patanjali IPO this year but a decision on it could be taken by the end of the ongoing financial year.
Ramdev, who practices and teaches yoga every morning from 5 to 10 am, is busy these days meeting various institutional investors ahead of
‘s Rs 4,300 crore follow-on public offer (FPO). His ‘karma yoga’ starts at 10 am and ends at 10 pm, says he.
“We will soon take a call on Patanjali IPO. One has to wait a bit,” Ramdev said in an interview to ETMarkets.com.
The yoga guru said the initial investor response for Ruchi Soya issue has been robust and that he would ensure that the price of the upcoming offering is fixed in the interest of all existing and potential shareholders.
Ramdev said potential investors in Ruchi Soya may take heart from the fact the company is aiming to transform itself into a major FMCG company.
“We are in a process of transforming the company, wherein its soul — its core commodity business — will account for 20 per cent of the business and rest would be all FMCG. That said, we would make sure the commodity business also grows in size, especially the edible oil business. We would want to be in palm oil plantation,” Ramdev said in his entrepreneurial avatar.
Last month, Ruchi Soya bought Patanjali’s biscuits and noodles unit for Rs 60 crore. Ramdev said he would ensure that Patanjali and Ruchi Soya offer differentiated products and that there is no overlap.
Ramdev’s Patanjali clocked a turnover of over Rs 30,000 crore in FY21. Out of this, Ruchi Soya contributed Rs 16,318 crore to sales. Sales in FY20 stood at Rs 25,000 crore in FY20, out of which Rs 13,117 crore was contributed by Ruchi Soya.
The yoga guru-led Patanjali acquired the bankrupt company known for Nutrela soya chunks in July 2019 under insolvency proceeds for Rs 4,350 crore. The acquisition was completed in December 2019.
Later on January 27, 2020, Ruchi Soya shares got relisted at about Rs 17 apiece on stock exchanges and ever since they have been on a dream run. Today, even as the scrip is off its 52-week high of Rs 1,377, it is up a whopping 6,476 per cent from its relisting price.
Due to the high promoter stake at 98.9 per cent in Ruchi Soya, the company is required to pare its stake to meet 75 per cent minimum public shareholding norms by December 2022, i.e. within three years of acquisition. In the forthcoming FPO, it may need to pare at least 9 per cent stake. A Rs 4,300 crore stake sale at the prevailing levels amounts to a 13 per cent stake.
Ramdev said his aim is to make Ruchi Soya debt-free within two years.
The company plans to use Rs 2,663 crore of the FPO proceeds for repayment of the company’s borrowings and Rs 593.4 crore for working capital. The remainder of the proceeds will be used by the company for general corporate purposes.
In the Covid period, Ramdev said, the fastest growth for Ruchi Soya has been delivered by Nutrela while for Patanjali it has been honey, Chayanprash and mustard oil. As far as Patanjali is concerned, the food segment comprises 60 per cent of its revenues. The rest is contributed by non-food segments.
Ramdev said he rarely saw any disruption due to Covid. During the period, Patanjali saw 10 per cent to 100 per cent growth in sales in certain products, thanks to a strong supply chain.
Ramdev said his companies would be focusing more on online distribution, exports and markets where it has lower reach. Besides, it will target select age groups where it sees opportunities, he said.