Patanjali Foods to Explore Acquisition of Patanjali Ayurved's Non-Food Division

Patanjali Foods Ltd, known for its stronghold in the edible oils sector, announced on Friday its plans to explore the acquisition of the non-food business segment from its promoter group, Patanjali Ayurved, led by Baba Ramdev. This strategic move aims to diversify and enrich its product range beyond its current offerings. The specific categories under consideration for acquisition include dental care, home care, and personal care products, which are significant contributors to Patanjali Ayurved's revenue, accounting for 50-60% of its total turnover.

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In a detailed regulatory filing, Patanjali Foods shared that its board has reviewed an initial proposal from Patanjali Ayurved Ltd regarding the sale of its non-food business to Patanjali Foods. The board has given in-principle approval to evaluate the most efficient ways to integrate Patanjali Ayurved's non-food portfolio into its operations. This evaluation will be conducted on an arm's length basis to ensure fairness and transparency. Furthermore, the board has empowered designated officials to conduct due diligence, engage professionals for negotiations, and present their findings for further deliberation.

The acquisition is seen as a strategic move to bolster Patanjali Foods' product offerings. Previously, in May 2021, the company expanded its portfolio by acquiring the biscuits business from Patanjali Natural Biscuits Pvt Ltd for Rs 60.03 crore. This was followed by the acquisition of the noodles and breakfast cereals business for Rs 3.50 crore in June 2021 and the food business in May 2022 for Rs 690 crore from Patanjali Ayurved.

The potential integration of Patanjali Ayurved's non-food business is expected to create synergies with Patanjali Foods' existing product lineup, enhancing brand diversity and contributing positively to revenue growth and EBITDA. Established in 1986 as Ruchi Soya Industries Ltd, Patanjali Foods Limited has emerged as a leading FMCG player with a presence in edible oils, food & FMCG, and wind power generation segments. The company boasts a wide array of brands including Patanjali, Ruchi Gold, and Nutrela.

With a significant increase in total income from Rs 24,284.38 crore in the fiscal year 2021-22 to Rs 31,821.45 crore in 2022-23, Patanjali Foods demonstrates robust growth potential. The proposed acquisition of key brands like Dant Kanti and Kesh Kanti from Patanjali Ayurved's portfolio could further solidify its market position and contribute substantially to its turnover.