Baba Ramdev’s Patanjali downgraded as acquisition of Ruchi Soya raises risks

By: |
October 5, 2019 8:54 PM

Patanjali Consortium Adhigrahan Pvt. -- a venture by Patanjali Ayurved and three other companies controlled by yoga guru Baba Ramdev -- is taking over Ruchi Soya Industries Ltd. for 43.5 billion rupees ($614 million).

Patanjali Ayurved, Baba Ramdev, Care Ratings,  Patanjali downgraded, Patanjali Consortium, Ruchi Soya, Patanjali Ruchi Soya dealCare Ratings Ltd. downgraded Patanjali’s long-term bank facilities to A- from A+.

An Indian credit rating company cut Patanjali Ayurved Ltd. by two levels, citing a likely weakening of its financial position as it partly funds a merger with a maker of soya products. Care Ratings Ltd. downgraded Patanjali’s long-term bank facilities to A- from A+, according to a statement on Friday. Care and Brickwork Ratings cut the company’s outlook to negative from stable.

Patanjali Consortium Adhigrahan Pvt. — a venture by Patanjali Ayurved and three other companies controlled by yoga guru Baba Ramdev — is taking over Ruchi Soya Industries Ltd. for 43.5 billion rupees ($614 million).

Care said the revision in the ratings takes into account the “expected weakening of its financial risk profile on account of large outflow of funds from Patanjali Ayurved to Patanjali Consortium Adhigrahan.”

India’s company court approved a bid by Patanjali Consortium last month to take over Ruchi Soya. Creditors of the cooking oil producer are set to receive a maximum of 42.4 billion rupees in repayments, a 65% haircut to their verified claims of about 121 billion rupees.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Bank lending activity now stronger than last year; credit growth at 6.6% in February
2ICICI Bank drops home loan rate to 6.7%
3Premier Energies bets on domestic content to add solar module capacity