Ruchi Soya locks at 10 per cent upper circuit; heres why!

Ruchi Soya to acquire Patanjali Ayurved's food business.

The shares of Ruchi Soya Industries Ltd soared 10 per cent to Rs 1,192.15 on NSE as the company announced that its board has decided to acquire the food business of Patanjali Ayurved Ltd for Rs 690 crore. The entire transaction is expected to be completed by July 15, 2022.  

The company has decided to change its name from ‘Ruchi Soya Industries Ltd’ to ‘Patanjali Foods Ltd’. With this deal, the company will be able to access the manufacturing plants located at Padartha (Uttarakhand) and Newasa (Maharashtra). Also, its business will include manufacturing, packaging & trading of nearly 20 products including ghee, honey, spices, juices, atta, etc.   

In the year 2019, Ramdev Baba’s Patanjali Ayurved acquired Ruchi Soya through an insolvency process and paid a whopping amount of Rs 4,350 crore.   

In March, Yoga guru Ramdev Baba said, "It will be difficult to make Ruchi Soya the top FMCG company in the food and FMCG space based on its offerings, so we decided to transfer the entire food portfolio to Ruchi Soya. Our food portfolio has very strong brand equity and sells on the basis of brand trust. We house popular products such as chyawanprash, medicated juices, etc".   

The stock has gained 30.13 per cent & 27.37 per cent over the last five days and one month, respectively. Considering its future long-term opportunities and strengths arising from sharing of resources between the two entities, keep a close eye on this scrip for the upcoming sessions.