"We don't know how to walk, we only know how to run," says Baba Ramdev, Founder of Patanjali Ayurved, as he describes the revival story of Ruchi Soya, which he acquired via NCLT (National Company Law Tribunal) in 2019 for Rs 4,350 crore.
The yoga guru-turned-businessman proudly states that Patanjali Ayurved, on the back of the once-bankrupt Ruchi Soya, closed FY21 with a revenue of Rs 30,000 crore. Ruchi Soya clocked a revenue of Rs 16,318 crore and an EBITDA (earnings with interest, taxes, depreciation, and amortisation) of Rs 1,800 crore. "No NCLT company has ever achieved such heights," he says.
Though Ramdev is brimming with ideas for the next level of growth in the domestic market, he is now aggressively looking at a global foray. "Patanjali is a leading local brand, now we are looking at becoming a global brand. We will grow our exports and look for good partners in the international market. If there is a requirement in a particular country, we may also set up production facilities."
Though the Patanjali founder doesn't divulge the markets that he is looking at entering, he says, "We want to be present in all the leading retail chains, we want to be at par with the global FMCG giants."
As far as Ruchi Soya is concerned, Ramdev's vision is to turn it around into a full-fledged food company, where 80 per cent of the revenue would be churned by its various brands. Early this year, the company got Patanjali's biscuits, noodles, breakfast products and nutraceuticals businesses into the Ruchi Soya-fold to make the latter a full-fledged food company. "Nutraceuticals is a Rs 50,000 crore market, growing at 20 per cent. If you look at the other food categories we are present in, they account for a Rs 500,000 crore market. We want to become market leaders in all those categories in India as well as globally," explains Ramdev.
He is also looking at making Ruchi Soya debt-free. The company would be going in for a Rs 4,300 crore stake sale, and 62 per cent of the proceeds would be used to pay off debts. "Around 14 per cent will be used for working capital, and the balance for brand building, distribution and manufacturing. Our priority is debt-free Ruchi Soya. We want to be completely debt-free in the next two years," says Sanjeev Asthana, CEO, Ruchi Soya.
Ramdev claims he has spent a considerable amount of his time in the last couple of years turning around the company. "We have hired professionals at the senior management level. The Ruchi Soya board comprises retired judges, policymakers, chartered accountants. We have brought in professional management practices and made the business transparent and accountable."
"In the last 10 years, the company's oil crushing business was unprofitable. That part of the business now churns a revenue of over Rs 200 crore. We have made a lot of corrections," he adds. Ruchi Soya's edible oil sales are in the region of 1.10 lakh tonnes per month, 80 per cent of which is branded play.
The major challenge for Ramdev post the acquisition of Ruchi Soya was to bridge the huge trust deficit. "The distributors and retailers didn't have trust in the company as it went bankrupt. I met all of them and won their trust. Not a single distributor or employee has left us. We have instead added 2,500 distributors in the last few years," claims Ramdev.
As the yoga guru carves the future of his FMCG empire, he is also building the nextgen talent for his company. He is training as many as 500 sanyasis, some of whom are being groomed to take over the mantle of Patanjali Ayurveda. "The future of Patanjali would be in the hands of highly capable sanyasis," he says.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today