Patanjali Foods to buy Non-Food Business of Patanjali Ayurved worth Rs.1,100 Crores
Patanjali Foods will acquire the non-food business of Patanjali Ayurved amounted to Rs.1,100. Patanjali Foods will be able to alter its portfolio and make its position in the wellness personal care market stronger through this acquisition.
Patanjali Ayurved’s huge variety of products such as personal care items, cosmetics and Ayurvedic medicines will be included in this acquisition. Patanjali Foods will be able to enhance its product offerings and also result in strong brand equity of Patanjali Ayurved in the health and wellness sector.
Patanjali Ayurved is a fast-growing company that started its journey and has become very popular in India following Baba Ramdev’s yoga association and Acharya Balkrishna. Since the company primarily focuses on natural and ayurvedic products, it has been able to corner a fair market share and seriously challenge the multinationals in various segments.
This is systemic with the group’s plan of rationalizing operations within the group and concentrating on core competency activities/segments. Based in Haridwar, Patanjali Foods started out in the business of edible oils and food items but has been branching out into other segments and the acquisition under discussion is one of the steps in this direction.
The Rs.1,100 crore deal will be a mix of cash accruals and borrowings since cash bleeds in this business are very visible. It shows the group’s belief in the possibility of expanding the non-food segment to be the future growth of the organization. Thus, Patanjali Foods will be inheriting a developed sales channel and customer base from its sister concern, Patanjali Ayurved’s non-food business, thus having a lot of room for further growth in the future.
The implication for consumers is that through mergers like this, there is a combined brand image which is witnessed by Patanjali Foods now tolerating a full line of products. As for the further strategy, the company wants to remain the supplier of healthy and natural food products, which will meet changing trends among consumers.
Thus, as the transaction progresses, everybody will be waiting to see how Patanjali Foods will manage the new business and how synergies are going to be used to build up its position on the market. The change is anticipated to lead to better operations and opportunities to expand that focus on the improvement of health and wellness in line with Patanjali’s business aims.
Thus it can be concluded that the action of dividing Patanjali Ayurved and its acquisition of non-food business by Patanjali Foods is a strategic move that will only benefit the company by having a stronger market position and more development opportunities. Thus, by leveraging on the overall strengths of both entities, Patanjali is in a position to unlock greater value in the current financial year, particularly from the customers as well as other stakeholders.
