Patanjali Foods gets proposal to acquire non-food business from Patanjali Ayurved

Patanjali Foods on Friday said that its Board of Directors, at its meeting held on April 26, 2024, discussed the initial proposal received from Patanjali Ayurved Limited for a sale of PAL’s non-food business undertaking to the company.

The Board accorded its in-principle approval for evaluating the most efficient mode of enhancing synergies with PAL’s non-food portfolio in any manner on an arm's length basis.

It also authorised officials of the company to carry-out due diligence, appoint professionals, negotiate the terms and conditions of the proposal, and report the findings to the Audit Committee and the Board for further consideration.

"We hereby wish to inform you that the Board of Directors (“Board”) of Patanjali Foods Limited (“Company”), at its meeting held on April 26, 2024, discussed the initial proposal received from the Board of Directors of Patanjali Ayurved Limited (“PAL”) for a sale of PAL’s non-food business undertaking (“Identified Undertaking”) to the Company," the company said in a regulatory filing on Friday.

The proposal received from PAL may offer synergies to the Company’s product portfolio with an array of brands and contribute to the growth in terms of revenue and EBITDA, the company added.

In the past to strengthen its product portfolio, the company acquired biscuits business of Patanjali Natural Biscuits Private Limited for Rs 60.03 crore in May 2021. The company also acquired Noodles and Breakfast cereals business for Rs 3.50 crore in June 2021, and food business in May 2022 for Rs 690 crore from Patanjali Ayurved Limited.

Earlier this week, Patanjali Foods incorporated two wholly owned subsidiaries, Contemporary Agro and Rishikrishi Farming in India. The company said the objective of both the companies is to provide training to farmers, to use other human resources in the field of farming, improve all type of farming and innovate in the area of farming, agriculture and plantation, to produce high quality of seed of fruits, vegetables and grains.

On April 15, the FMCG company said that it has recorded a steady quarterly performance led by consistent result in both the edible oil segment and the food & FMCG segment. During the quarter, the prices of edible oils in India remained stable and rebounded from the low levels witnessed in the previous quarter.

Revenue from the edible oil segment in Q4 showed modest single-digit growth compared to the previous quarter, accompanied by a favorable EBITDA margin. Furthermore, the segmental volume in Q4 experienced mid-single-digit growth year on year, while FY24 witnessed double-digit growth.

Patanjali Foods shares have gained 45% in a year and lost 10.40% since the beginning of this year.