The yoga guru and founder of Patanjali Ayurved, Baba Ramdev, has said in a recent interview that the Patanjali IPO is in contention but not confirmed yet. According to him, the decision to launch this IPO will be finalised by the end of this financial year.
Currently, he is busy with Ruchi Soya’s Rs. 4300 crore follow-on public offer (FPO). He is meeting institutional investors regarding this FPO and will take a call on Patanjali at the earliest.
In the meantime, he is hopeful about the robust response received by Ruchi Soya. Also, he will ensure that the price of future offerings will be determined, keeping current and prospective investors in mind.
Is Patanjali IPO Worth the Wait?
Patanjali is one of the leading FMCG companies in India. It has skillfully leveraged the Made in India sentiment, competing toe to toe with more established organisations like Hindustan Unilever and Himalaya.
Here are some notable reasons to be excited about this Patanjali IPO –
1. Patanjali’s business sits on robust financials. The company’s financial records reflect its strong turnover and profit margins. Revenue from operations in FY2020 was Rs. 9022.71 crores and Rs. 8522.68 crores in FY2019. Whereas the standalone profit jumped 21.56% to Rs. 424.72 crores in FY2020, compared to Rs.349.37 crores in FY2019.
2. Patanjali has a loyal customer base and operates on a franchise model to help consumers shop directly from company stores. Also, their online retail platform provides direct access to their products.
3. The Covid-19 pandemic didn’t have any major effect on Patanjali’s sales owing to its strong supply chain.
4. In the coming years, Patanjali plans to focus on the edible oil business and get into the palm oil plantation, an industry with global demands.
Besides these, Patanjali IPO will be an attractive proposition because of stability at the management level paired with an ambitious business plan. Nonetheless, it is always important to read through company details and its financials before making any decision.
How Does Ruchi Soya Figure in This IPO?
In 2019, Patanjali acquired the then bankrupt company popular for its Nutrela soya chunks for Rs. 4350 crores. Ruchi Soya was then re-listed at around Rs. 17 per share in January 2020.
Since then, it has been on a dream run.
According to data, Patanjali has clocked a total turnover of Rs. 30,000 crores in FY2021, of which Ruchi Soya contributes Rs. 16,318 crores. Therefore, the latter is significant to buoying Patanjali’s upcoming IPO’s value.
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Ruchi Soya brought Patanjali’s noodles and biscuit unit for Rs. 60 crores via an assignment agreement dated 2 June 2021 ahead of its further public offer.
Commenting on Ruchi Soya and its future, Ramdev mentioned that he has plans to make this company debt free in 2 years.
Also, he will turn Ruchi Soya into a leading FMCG company keeping its core business intact, i.e. Nutrela soya chunks.
At the same time, Baba Ramdev mentioned that Patanjali and Ruchi Soya would have two different product line-ups.
Patanjali has been a strong performer, and the addition of Ruchi Soya opens up possibilities. It allows them to diversify revenue streams and expand their business into different verticals. Therefore, if and when the time comes, subscribing to Patanjali IPO can be a profitable decision.
Frequently Asked Questions
- When will be the announcement of Patanjali IPO?
There is no concrete news available regarding this at the moment.
- When was Patanjali founded?
Baba Ramdev and Acharya Balkrishna founded this company in 2006.
- Which investment banks are in charge of this IPO?
The details are not yet disclosed by Patanjali.
- Who will be the registrar of Patanjali IPO?
Information regarding the registrar of Patanjali IPO is yet to be announced.
- What will be the issue size for Patanjali IPO?
This information is not available at the moment.