Ruchi Soya Industries Limited, being promoted by Baba Ramdev, is once again in the news. Ruchi Soya entered the market with an FPO (Follow-on-Public) offer of Rs 4,300 crore. The FPO was to close on March 28, but did not close on March 30. Sebi has taken up the issue with the company, calling it a breach of promise. In September 2021 also, SEBI had issued a warning to the company. Then a video of Baba Ramdev had surfaced. In this, he was allegedly telling Ruchi Soya’s investment in FPO the mantra to become a millionaire. Sebi had issued a warning to Ruchi Soya, calling it a false propaganda of FPO.
The story of when Ruchi Soya was bought by Ramdev’s trust Patanjali. Ruchi Soya himself had a loan of crores of rupees to the banks. Despite this, the same banks gave loans to Baba Ramdev’s trust to buy Ruchi Soya. Despite the poor credit rating of Patanjali, a consortium of banks led by Punjab National Bank issued a loan of 3300 crores to Ramdev.
According to a report in Outlook Business, Ramdev was sanctioned loan in December 2019 for the acquisition of Ruchi Soya. Whereas in October this year, credit rating agencies ICRA, CARE downgraded Patanjali’s rating from A+ to BBB. When ICRA raised questions on Patanjali Ayurved, CARE said that according to the data of March 2019, 151% of the net worth of Ramdev was to be invested in buying Ruchi Soya.
In November 2019, another rating agency Brickwork Ratings also shocked Patanjali when it said that the condition of Ramdev’s companies was not good and the decision to acquire Ruchi Soya could prove to be suicidal for it. Brickwork downgraded the rating of Patanjali Food and Herbal Park in Nagpur to BBB+. The rating agency believed that Patanjali’s structure was under question. His board includes people like Ram Bharat (Ramdev’s brother) and his wife.
State Bank issued a loan of Rs 1300 crore to Patanjali, Rs 700 crore to Punjab National Bank, Rs 600 crore to Union Bank, Rs 400 crore to Syndicate Bank and Rs 300 crore to Bank of Baroda for the acquisition of Ruchi Soya. Despite that 933 loans of State Bank, 346 of PNB, 149 of Union Bank, 147 of Syndicate Bank and 121 crores of Bank of Baroda had been declared as non-performing assets. This loan was issued to Ruchi Soya.
When Ramdev acquired Ruchi Soya, the company had a debt of 12146 crores in 2017. Of this, Rs 9385 crore was from nationalized banks and financial institutions. Then the case against the company was going on in NCLT. Was. Banks gave Rs 3300 crore to Ramdev for the acquisition plan of Rs 4350 crore.
According to the takeover proposal, an amount of Rs 4053 crore was to be returned to the banks. While he owed Rs 9385 crore to Ruchi Soya. That is, he was going to get only 57 percent of his sunk amount. Still, he gave a loan for the acquisition of Ruchi Soya. In addition, Rs 1700 crore was released to Patanjali as working capital. The group of 11 banks gave this amount to Ramdev’s group. In return, Patanjali’s chairman Acharya Bal Krishna got 50 percent stake in Ruchi Soya, then all the goods and assets of the company went to Patanjali.
Singapore’s DBS Bank had objections to Ruchi Soya’s acquisition plan, contrary to the attitude of Indian banks, but its objection had no effect. The Bank of Singapore also had a loan outstanding on Ruchi Soya. When Patanjali acquired Ruchi Soya in 2019, it had invested Rs 4350 crore. Today the situation is that the FPO of Ruchi Soya has reached 3.6 times.