Mumbai: Baba Ramdev’s Patanjali Ayurved Ltd, which has put in a bid for Ruchi Soya Industries Ltd, is in talks with Godrej Agrovet Ltd for a potential tie-up for the bid, two people aware of the matter said.

According to the people cited above, who spoke on condition of anonymity, Patanjali may sell Ruchi Soya’s palm oil plantation assets to an external buyer if its bid is successful.

“Talks between Patanjali and Godrej Agrovet are informal at this stage," said the first of the two people. “However, Patanjali may seek an exclusive supply contract with the buyer," this person said, adding it is possible the plantation business can be transferred to a separate entity with both sides owning stakes. Ruchi Soya is undergoing insolvency resolution.

“Patanjali which already sources raw material from Ruchi Soya is mainly interested in acquiring the brands of the company some of which command significant market share," said the second person. Ruchi Soya’s food products include healthy cooking oils, nutritional soya foods, top-grade vanaspati and bakery fats. The edible oil range includes brands like Mahakosh Soyabean oil, Ruchi Gold Palmolein and Sunrich sunflower oil. Nutrela is one of the largest selling soya foods brand, with more than 50% market share. Ruchi Soya has close to 110,000 hectares of palm plantations in various parts of the country.

“Godrej Agrovet Ltd is not in talks with any organization for a tie-up to bid for Ruchi Soya Industries. It is apparently hearsay and we deny any such talks," said Balram Singh Yadav, managing director, Godrej Agrovet, said in an email reply to Mint’s queries.

In May, Times of India reported Patanjali had made a bid of 4,000-4,500 crore for Ruchi Soya, beating Adani Wilmar, Godrej Agrovet and Emami’s offers. Adani Wilmar has made the second highest offer for Ruchi Soya, the report said.

Mint reported in March that Godrej Agrovet was looking to bid for Ruchi Soya with an eye on its palm oil business. Since Godrej is not interested in Ruchi Soya’s other businesses, it may tie up with others keen on those businesses, the Mint report had said citing persons with direct knowledge of the matter. Godrej Agrovet is among the largest oil palm developers in India and owns more than 61,700 hectares of plantations across Andhra Pradesh, Telangana, Tamil Nadu, Goa, Maharashtra and Mizoram producing crude palm oil, crude palm kernel oil and palm kernel cake. Apart from palm oil, the company also has significant present and market share in animal feed and crop protection segments.

Patanjali which had doubled its revenue in FY17 to around 10,000 crore, closed FY18 at nearly the same revenue level, which the company has said was due to the effects of demonetisation and implementation of goods and services tax ( GST). Significantly Baba Ramdev, the yoga guru-turned Patanjali founder had said Patanjali would continue to “double revenue every year" to cross Rs20,000 crore in the year ended March 2018 and subsequently would cross the annual revenue of India’s largest packaged goods company Hindustan Unilever Ltd by 31 March 2019, Mint reported in May this year.

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