Mumbai: Shares of Ruchi Soya Industries have gained about 15% to Rs 845 in the last week after Baba Ramdev led Patanjali Ayurved agreed to transfer the biscuits business of Patanjali Natural Biscuits Private Limited (PNBPL) to the firm for just Rs 60 crore on May 10.
As per the deal, Ruchi Soya will acquire PNBPL's manufacturing, packing, and labelling of biscuits, cookies, rusk, and other associated bakery products, supporting the company's ongoing strategy to consolidate its position as a leading FMCG player.
PNBPL's biscuits division revenues have more than doubled to Rs 900 crore in FY21, valuing the business about Rs 3,000 crore, according to sources.
"The transfer of PNBPL's biscuits division to Ruchi Soya is intended to strengthen the balance sheet and valuation of Ruchi Soya ahead of the proposed follow-on public offer," said Mumbai based analyst tracking the company.
The acquisition will allow Ruchi Soya to participate and create value in the biscuit, cookies, rusk, and other associated bakery product categories in India.
As a part of its product expansion strategy, the Ruchi Soya has successfully launched products like honey, high protein atta, and ultra-premium edible oil under the Nutrela brand in the last fiscal.
Ruchi Soya shares continued heading north as it gained 4% to close at Rs 845 in a weak Mumbai market on Wednesday, valuing the company at Rs 24,987 crore.
As per the terms of the deal, the transaction includes certain contract manufacturing agreements and transfer of employees, assets, and liabilities, licenses, and permits (excluding certain assets and liabilities of PNBPL as specified under the BTA).
The deal further prohibits PNBPL and its affiliates, including Patanjali Ayurved Limited, from entering into any competing business of biscuits in India as part of a non-compete arrangement.