RIDING RUCHI SOYA

YOGA GURU-turned-corporate honcho Baba Ramdev can make you believe that setting up a business empire is child’s play. Not only is his appetite to take risks extremely high, but his confidence to succeed against all odds is even more compelling. His company, Patanjali Ayurved, acquired the bankrupt Ruchi Soya through an NCLT (National Company Law Tribunal) process in 2019. And in the two years since, the company has turned profitable. When asked what he did differently to turn it around in such a short span, Ramdev laughs aloud and says, “Ruchi Soya is Patanjali Ayurved’s kulvadhu (bride). When a girl becomes a part of a renowned family, her brand equity automatically goes up. That’s what has happened with Ruchi Soya, too.”

Glib rhetoric aside, Ruchi Soya’s turnaround story indeed sounds remarkable. Patanjali Ayurved bought out the company when it was staring at a debt of ₹12,000 crore. In a short span of two years, the debt has reduced to ₹3,300 crore. It also boasts net profit of ₹680.77 crore and EBITDA of ₹1,018.37 crore in FY21. Now, having transformed Ruchi Soya from a white elephant to a clear, deep grey, the 50-year-old swami wants to ride it to make Patanjali Ayurved India’s largest FMCG company with international presence to boot — in at least 50 countries — within the next one year.

His track record with Ruchi Soya could lend some credence to this ambition. However, Ruchi Soya is a listed company, unlike Patanjali Ayurved. So, market watchers will have their say—stock market analysts as well as the industry at large are decidedly cynical. Both Ramdev and his close associate, Acharya Balkrishna (Joint Managing Director of Patanjali Ayurved), are no strangers to controversy. Chatter about the lack of corporate governance and transparency in Patanjali Ayurved has come out in the open far too often. The duo’s political leanings make the analysts even more uncomfortable. Ruchi Soya was bought through an NCLT process after the banks took a haircut of over 60 per cent and that further adds to market scepticism. “Analysts are also sceptical because even during the heydays of Ruchi Soya, the owner never gave disclosures. After the takeover, there is again a perception issue as nobody [really] knows Baba Ramdev,” says Arun Kejriwal, Founder of Kejriwal Research and Investment.

Expectedly, the swami and Balkrishna scoff right back at the sceptics