RUCHI SOYA’S STRONG COME BACK POST ITS ACQUISITION BY PATANJALI

Ruchi Soya Industries was given a loan of Rs.1816 Cr by SBI. But due to the company's non performing assets SBI had to write off 746 Cr from 1816 Cr of loan. Despite this, SBI has lent 1200 Cr to Patanjali Ayurved  to acquire the same company mentioned above and this was approved by Insolvency and Bankruptcy Code (IBC). And SBI was not the sole creditor to Ruchi Soya, Banks like Central Bank of India, Standard Chartered Bank India have totally lent 12,146 Cr to Ruchi Soya. 

After this Acquisition and after its relisting on stock exchange with a new promoter group, the share price of Ruchi Soya has jumped from Rs. 3.50 to Rs. 1535 which is a gain of 43757.14%. And Patanji has established a Special Purpose Vehicle called Patanjali Consortium Adhigrah into which Rs. 4350 Cr was infused and would be later amalgamated with Ruchi Soya. Out of the said Rs. 4350 Cr, Rs. 204.75 Cr would be infused as equity and Rs. 3,233 Cr. would be infused as a debt and another additional Rs. 900 Cr would be infused through non convertible debentures and preference shares. 

In this case it is seen that SBI could have acted more proactively by not writing off the debt given to ruchi soya because SBI thought there would be no chance of recovery. But as mentioned above the company’s share price has seen a tremendous growth after the acquisition of Ruchi Soya by Patanjali. And Patanjali was supposed to repay Rs. 4053.19 Cr to its creditors. 

And such ignorance is not evident by SBI for the first time. Since the last 8 FYs SBI has massively written off 1.23 Lakh Cr from its balance sheet and SBI only managed to recover only 7% of its debts (Rs. 8969 Cr).