On Thursday, for the first time, Baba Ramdev-led Patanjali Ayurveda entered the bond market, hoping to raise Rs 250 crore through debentures, the issue for which was subscribed merely within 3 minutes. The thrilling response received by the Baba Ramdev firm was termed historic by the managing director of Patanjali Ayurveda, Acharya Balakrishnan.
It was reported that Patanjali stepped foot in the bond market and other secondary markets to raise capital making use of the low borrowing costs in these markets. It was also added that the money raised from the above step would be used to meet the working capital requirements and strengthen the supply chains.
Commenting on the response received, the company elucidated: “This is historic that our maiden issue of Rs 250 crore NCD is fully subscribed within 3 minutes of opening the issue… This shows the excitement and faith of the investors. It was also added that the debt has been rated AA by rating agency Brickwork and that the non-convertible debentures issued by the firm carry a coupon rate of 10.10% with a tenor of three years, translating to a maturity date of May 28, 2023. The firm also commented that the response received by the companies in the bond market is a reflection of the trust of billions.”
Patanjali is one of the most trusted brands of India and has indeed made the Swadeshi movement led by Swami Ramdev a must for Strong and self-reliant India. It was reported that the NCDs would be listed on the stock exchanges and would be redeemable. In recent times a large number of Indian firms have been entering the secondary markets to raise capital as they are facing a liquidity crunch.
It is further added that the firms are using the route to raise funds and also meet the necessary capital requirements and fixed costs. The firm who is a manufacturer of Ayurvedic products ranging from healthcare and food and even beauty products had been facing a lot of liquidity problems due to increased investment and capital expenditure. Bloomberg also reported that the yields on its AA-rated three-year corporate bonds fell to the lowest level on Tuesday in more than a decade.
Patanjali was founded by yoga guru Baba Ramdev and the company has been increasing its market reach and share by selling consumer goods and medicines. Last year in December, it was also reported that the firm acquired the bankrupt Ruchi Soya for Rs 4,350 crore through the insolvency process. As Adani Wilmar which sells edible oil under the Fortune Brand withdrew from the race citing significant delays in the resolution process, Patanjali won the bid to acquire Ruchi Soya.