Baba Ramdev-led Patanjali Ayurved has got a thumbs-up from the bond market investors for its inaugural issue, which was fully subscribed within minutes. Patanjali Ayurved's Rs 250 crore non-convertible debentures (NCDs) issue elicited enthusiastic response and was fully subscribed within three minutes of opening on Thursday.
This is the first-ever issuance of debentures by the Haridwar-based firm which intended to use fund to meet its working capital requirements and strengthen the supply chain network. The debenture has been rated as AA by Brickwork.
The NCDs carry a coupon rate of 10.1 per cent with a tenure of three years. It would be listed on the stock exchanges and are redeemable.
"In this pandemic, demand for Ayurveda-based products, which help in boosting immunity, along with other products has gone up by three-folds. That has put constraints in our supply chain, right from manufacturing to distribution," Patanjali spokesperson S K Tijarawala told PTI.
"We are raising this (fund) to strengthen this one (supply chain), so that we can smoothen our process from manufacturing to distribution, he added.
Recently, several companies, including Reliance Industries, Tata Steel, HDFC Bank M&M, raised money from the bond market after the Reserve Bank of India (RBI) decided to provide additional liquidity in the system to help borrowers dealing with the economic damage caused by coronavirus pandemic.
In a bid to maintain stability in the financial system in the wake of COVID-19 outbreak, the RBI on March 27 introduced the Targeted Long Term Repo Operations (TLTROs), as a tool to enhance liquidity in the system, especially the corporate bond market. The central bank will lend as much as Rs 1 lakh crore under TLTRO to counter the large sell-offs in the domestic equity, bond and forex markets caused by the coronavirus crisis.
In December last year, Patanjali Ayurved had completed the acquisition of bankrupt Ruchi Soya for Rs 4,350 crore through an insolvency process. 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 resolution process that led to deterioration of assets.
BY Chitranjan Kumar with agencies inputs