Baba Ramdev takes bond street: Patanjali to raise Rs 250 cr in debentures; here’s how it will use the money

Baba Ramdev-led Patanjali Ayurveda is planning to raise Rs 250 crore by issuing debentures, in an attempt to meet its working capital requirement.

Baba Ramdev-led Patanjali Ayurveda is planning to raise Rs 250 crore by issuing debentures, in an attempt to meet its working capital requirement. The move will help the company — that produces ayurvedic consumer goods — strengthen its supply chains which, according to the company, is facing some challenges owing to the huge demand for ayurveda-based products it is currently witnessing. 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, news agency PTI reported. 

The non-convertible debentures (NCD) will carry a coupon rate of 10.10% with a tenor of three years. The bidding for the debentures would start on May 28, translating to a maturity date of May 28, 2023. “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,” a Patanjali spokesperson told PTI. Patanjali said it is raising funds to strengthen the supply chains and smoothen the distribution and the manufacturing network. Patanjali’s redeemable debentures have been rated as AA by credit-rating agency Brickwork Ratings. Facing a liquidity crunch, a number of public and private firms have taken to the secondary markets to raise funds. 

Founded by yoga guru Baba Ramdev, Patanjali Ayurvedic medicines and consumer goods. According to the company website, products range from healthcare, lifestyle, skin care and food products. In December last year, the Haridwar-based Patanjali group acquired the bankrupt Ruchi Soya for Rs 4,350 crore through an insolvency process. Ruchi Soya manufactures soya food brand Nutrela. 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 deterioration of assets.