ICICI, HDFC Bank Of­fer Loans to Patan­jali

Baba Ramdev’s Harid­war-based con­sumer goods maker firm looks to raise 1,000 cr this fis­cal

The Economic Times - - Diruption: -

Mum­bai: ICICI Bank and HDFC Bank have of­fered to pro­vide loans to yoga guru Baba Ramdev’s rapidly ex­pand­ing Patan­jali Ayurved, which is look­ing to raise about ₹ 1,000 crore this fis­cal, at a time when lenders are shy­ing away from most cor­po­rate bor­row­ers.

The two pri­vate sec­tor banks re­cently ap­proached the Harid­war­based con­sumer goods maker to of­fer cor­po­rate loans, the com­pany’s manag­ing di­rec­tor Acharya Balkrishna told ET. Pub­lic sec­tor banks State Bank of In­dia and Pun­jab Na­tional Bank have so far ex­tended credit fa­cil­ity to the com­pany so far, he said.

“While big in­dus­tri­al­ists fail to re­pay loans, we pay off our dues right on time. This is made pos­si­ble due to our es­ca­lat­ing prod­uct sales,” Balkrishna said, cit­ing a re­pay­ment to Pun­jab Na­tional Bank.

Patan­jali Ayurved, which is com­pet­ing with lead­ing fast-mov­ing con­sumer goods mak­ers such as Unilever, Nes­tle and ITC, plans to


raise funds through bank term loans or cor­po­rate bonds as it aims to dou­ble its pro­duc­tion ca­pac­ity to 2,000 tonnes a day by the end of 2016-17.

Queries emailed to both ICICI Bank and HDFC Bank re­mained unan­swered till late evening on Sun­day.

“Who­ever gives us cheap money, we will go for it as we are ex­pand­ing fast,” Balkrishna said. “More banks are com­ing to us with their of­fers while a few mer­chant bankers too con­tacted us with fundrais­ing pro­pos­als via bond sales. We are ex­plor­ing all op­tions,” he said.

The com­pany man­u­fac­tures a large num­ber of fast-mov­ing con­sumer goods, and herbal and ayurvedic prod­ucts. It is now plan­ning to set up man­u­fac­tur­ing units in Ma­ha­rash­tra, Mad­hya Pradesh, Pun­jab, Jhark­hand and West Ben­gal as well. Its new prod­uct lines may in- clude nu­tri­tion baby foods.

“They may re­quire project fi­nanc­ing as they plan to set up food parks in some lo­ca­tions this year,” said MSR Man­ju­natha, rat­ing an­a­lyst at Brick­work Rat­ings, which has graded the com­pany with AA- (sta­ble outlook). “We have rated them for a work­ing cap­i­tal loan fa­cil­ity for now,” he said.

A few months ago, Care Rat­ings graded the com­pany triple B+, one notch lower than the cur­rent rat­ing.

In 2015-16, the com­pany paid about 10% in­ter­est on av­er­age on its bor­row­ings. The com­pany is be­lieved to have taken loans of less than ₹ 500 crore dur­ing the fis­cal, but the ex­act num­ber could not be ver­i­fied.

It re­ported a turnover of ₹ 3,267 crore till Jan­uary for 2016-17 com­pared to ₹ 1,588 crore a year ago, Brick­work Rat­ings said, cit­ing pro­vi­sional data.

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