Baba Ramdev-led Patanjali Ayurveda entered the bond market for the very first time on Thursday, hoping to raise Rs 250 crore through debentures. The issuance was fully subscribed within three-minutes. The ecstatic response to the Baba Ramdev’s firm was termed historic by the Managing Director of Patanjali Ayurveda, Acharya Balakrishnan, PTI reported. Patanjali Ayurved stepped foot into the secondary markets to raise capital making use of the low borrowing costs in the secondary markets. The money, according to Patanjali will be used to meet the working capital requirements and strengthen the supply chains.
“This is historic that our maiden issue of Rs 250 crore NCD is fully subscribed within 3 minutes of opening of the issue… This shows the excitement and faith of investors,” said Acharya Balkrishna. The debt has been rated AA by rating agency Brickwork. The non-convertible debentures issued by Patanjali Ayurveda carry a coupon rate of 10.10% with a tenor of three year, translating to a maturity date of May 28, 2023. Patanjali said the response received by the company in the bond market is a reflection of the trust of billions. “… Patanjali is the most trusted brand of India and has made the Swadeshi Movement led by Swami Ramdev a must for Strong and self-reliant India,” the company said. The NCDs would be listed on the stock exchanges and are redeemable.
A large number of firms from India Inc. have been entering the secondary markets to raise capital as they are facing a liquidity crunch. Firms are using the route to raise funds and meet capital requirements and fixed costs. Patanjali — the manufacturer of ayurvedic products ranging from healthcare segment to foods to even beauty products — has reportedly been facing liquidity crunch due to increased investment and capital expenditure, according to Brickwork. Yields on AA-rated three-year corporate bonds on Tuesday fell to the lowest level in more than a decade, according to Bloomberg.
Patanjali Ayurveda was founded by yoga guru Baba Ramdev. The company has been increasing its market reach and share by selling consumer goods and medicines. 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.