Baba Ramdev-led Patanjali Ayurved plans to issue debentures worth Rs 250 crore that will be used to meet its working capital requirements and strengthen supply chain network.
This would be the first-ever issuance of debentures by the Haridwar-based firm, which has emerged as one of the leading companies in the FMCG segment in recent years.
The non-convertible debentures (NCDs) will carry a coupon rate of 10.10 percent with a tenure of three years. The maturity date is May 28, 2023.
According to information, the bidding date would start on May 28 for NCDs, which 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 SK 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.
The debenture has been rated as AA by Brickwork.
Recently, several companies announced plans to raise money from the market through debentures, as they are facing a liquidity crunch.
Companies also need money to meet the costs involved in resuming their production capacity and augmenting their supply pipelines.
In December last year, the Haridwar-based group had completed the acquisition of bankrupt Ruchi Soya for Rs 4,350 crore, maker of soya food brand Nutrela 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.
Recent updates show that within three minutes of opening, Patanjali Ayurved's Rs 250 crore debentures issue got fully subscribed.
"This is historic that our maiden issue of Rs 250 crore NCD is fully subscribed within three minutes of opening of the issue... This shows the excitement and faith of investors", said Patanjali Ayurved Managing Director Acharya Balkrishna.
The Haridwar-based firm will use this fund for working capital requirement and strengthening of its supply chain network.
Edited by Javed Gaihlot