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2 min read | Updated on July 02, 2024, 17:59 IST
SUMMARY
Patanjali Ayurved’s home and personal care business currently caters to four key segments, including dental care, skin care, home care and hair care. Patanjali Foods also announced a licencing deal with Patanjali Ayurved for use of its licenced intellectual properties through an agreement.
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Patanjali Foods Board approves ₹1,100-crore deal with Patanjali Ayurved, shares slide over 4%
The move accelerates Patanjali Foods’ transition into a leading FMCG company. Patanjali Ayurved’s home and personal care business currently caters to four key segments, including dental care, skin care, home care and hair care.
Patanjali Foods also announced a licencing deal with Patanjali Ayurved for the use of its licenced intellectual properties through an agreement.
The consideration for granting a license is 3% of the products' ‘actual gross sales value’, subject to a minimum yearly payment of ₹83 crore.
The transaction falls under the related-party transaction as Patanjali Ayurved is one of the promoters of Patanjali Foods.
“The transaction is being undertaken on fair value and on an arms' length basis,” the company said in the stock exchange notification. “No entity is being acquired. The company has only entered into a license agreement,” Patanjali Foods informed the bourses.
The license agreement would be effective once the infrastructure of Patanjali Foods is ready for the use of the licences.
After the announcement, shares of Patanjali Foods dropped as much as 4.31% on Tuesday to hit an intra-day low of ₹1,626 apiece on the NSE. However, in early trades, the shares gained as much as 3.8% to hit a record high of ₹1,764.4, but they couldn’t sustain the rally.
Patanjali Foods shares closed 1.71% lower at ₹1,670 apiece on the NSE.
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