Patanjali Foods

Continue to leverage the Patanjali brand and enhance synergies

Enhance the high margin premium food portfolio through the Nutrela brand and increase its brand awareness

Intend to increase its market share by deeper penetration in existing markets and expanding its footprints in newer markets

The Company intends to continue its focus on backward integration, by increasing the overall palm plantation area under cultivation.

Expanding its 100% plant based and vegetarian nutraceuticals products portfolio

Expansion of its distribution network through diversification and supply chain optimization

Continue to improve operational efficiency through enhanced usage of various softwares and technology

The company inability to anticipate, respond to and meet the tastes, preferences or consistent quality requirements of its consumers or the company inability to accurately predict and successfully adapt to changes in market demand or consumer preference could reduce demand for its products and in turn, impact its sales.

The company revenue significantly depends on the sale of its edible oil products and any decline in the sale of its edible oil products, specifically palm and soyabean oil, in the market would have a material adverse effect on its business, financial condition and results of operation.

The company depend almost entirely on third-party suppliers in respect of availability of its raw materials. An interruption in th supply of such products and price volatility could adversely affect its business, results of operations and financial condition.

The Company is required to comply with the minimum public shareholding requirements prescribed under the SCRR and any sale of Equity Shares by its Promoters or further issue of Equity Shares by the Company in order to comply with the minimum public shareholding requirements prescribed under the SCRR may adversely affect the trading price of its Equity Shares. Failure to comply with the minimum public shareholding requirements by its Company may result in certain adverse consequences, including delisting of its Equity Shares.

The company has `take or pay agreement` with one of its Promoters, Patanjali Ayurved Limited to ensure sufficient cash flows of its Company for timely repayment of the facilities by assured capacity utilisation of certain refining units owned by the Company for a term of 10 years. Any discontinuance or termination of this agreement will result into material adverse effect on its business financial condition and results of operation.

The company has recently forayed into a new business of Nutraceuticals. In case these new products are not accepted by its customers and/or achieve the profitability that justifies its investment, may have an adverse impact on its prospects, growth, results of operations and financial condition.

The business transfer on a slump sale basis of biscuits, cookies, rusk and other associated bakery product business from one of its Promoter i.e. Patanjali Natural Biscuits Private Limited may have regulatory implications and there can be no assurance as to the timing and amount of any returns or benefit that its Company may receive from its recent acquisition through assignment of noodles and breakfast cereals business.

Loss or the disruption or interruption in the operations of its contract manufacturers or its failure to identify timely new contract manufacturers could harm the company business and impede its growth.

Unfavourable local and global weather patterns may have an adverse effect on its business, results of operations and financial condition.

The company is involved in certain litigation proceedings and any adverse outcome in any of these litigations may have an adverse impact on its business, results of operations and financial condition.

Conflict of interest may arise out of similar business undertaken by its Company and certain of its Promoters and/or Directors which could adversely affect its business, prospects, results of operations and financial condition.

Any delay in production at, disruption or shutdown of its manufacturing facility, or failure to achieve optimal capacity utilisation at such facility could adversely affect its business, results of operations and financial condition.

The company inability to manage its inventory and foresee accurate demand for its products for a future period may adversely affect its reputation, business, results of operation and its financial performance.

The company has experienced negative cash flows in the prior periods.

Certain of its Promoters have pledged their Equity Shares and entered into an unattested share pledge agreement in favour of a common security trustee. Any exercise of such pledge by any lender or enforcement of such pledge could dilute the shareholding of such Promoters, which may adversely affect its business and future prospects.

The company operate in nine business verticals and its inability to manage its diversified operations may have an adverse effect on its business, results of operations and financial condition.

The COVID-19 pandemic, or any future pandemic or widespread public health emergency, could materially and adversely impact its business, financial condition, cash flows and results of operations.

Some of its loan agreements contain restrictive covenants which may adversely affect its business, results of operations and financial conditions.

Non-compliance with and changes in, safety, health, environmental and labour laws and other applicable regulations, may adversely affect its business, results of operations, financial condition and cash flows.

The company has not been able to obtain certain records of the educational qualifications of a Director and have relied on declarations and undertakings furnished by such individual for details of her profile included in this Draft Red Herring Prospectus.

Certain of its intellectual property rights may not be adequately protected against third party infringement.

Any increase in or realization of its contingent liabilities could have a material adverse effect on its business, results of operations and financial condition.

The examination report on its Restated Financial Statements contains certain qualifications and matters of emphasis.

The Company is named as a party in certain legal proceedings initiated by third parties against its Company, prior to implementation of the Patanjali Resolution Plan. The company name may not be deleted from such proceedings and the concerned court or authority may pass an order adverse to the company in any such litigation.

Exchange rate fluctuations and fluctuations in agricultural commodities prices may adversely affect its results of operations.

We require sizeable amounts of working capital for The company continued operation and growth. Its inability to meet its future working capital requirements could have a material adverse effect on its business, results of operations and financial condition.

Some of its products are subject to seasonal variations and as a result, its quarterly results of operations may fluctuate.

The company operate in a competitive environment and may not be able to effectively compete which could have a material adverse effect on its business, results of operations and financial condition.

The company ability to pay dividends in the future will depend on a number of factors, including its profit after tax for the fiscal year, the company capital requirements, its financial condition, its cash flows and applicable taxes, including dividend distribution tax payable by the company.

The company is subject to business risks inherent to the oil palm industry that may adversely affect its business.

Fluctuations in the price of crude palm oil and other oil palm products could adversely affect its business and results of operations.

The company failure to protect confidential information like its product recipes, formulations, pricing or launch information could adversely affect its competitive position.

There have been certain lapses in compliance with the provisions of the Companies Act and SEBI Listing Regulations in the past.

The Company was incorporated in the year 1986 and its Company was acquired by the current Promoters and Management on December 18, 2019, certain corporate records are not traceable.

The company Promoters namely Acharya Balkrishna and Ram Bharat and directors of one of its Promoter, Patanjali Ayurved Limited have provided personal guarantees and certain of its Promoters have given a letter of comfort, for loans availed by the company. In event of default on the debt obligations, the personal guarantees and letter of comfort may be invoked thereby adversely affecting its Promoters ability to manage the affairs of its Company and consequently this may impact its business, prospects, financial condition and results of operations.

The company could be adversely affected by negative publicity regarding its products.

The success of its business depends on its management team and key operational workforce. Its inability to retain them could adversely affect its businesses.

The company inability to expand or effectively manage its growing super stockists and distribution network or any disruptions in its supply or distribution infrastructure or termination of its distributor agreement with Patanjali Ayurved Limited may have an adverse effect on its business, financial condition and results of operations.

Concerns over nutritional values of its products may reduce demand for its products or increase the cost of its products.

If there are delays or cost overruns in utilisation of Net Proceeds, its business, financial condition and results of operations may be adversely affected.

The company success depends on the smooth supply and transportation of raw materials from its suppliers to its plants and of its products from the company plants to its customers, which is subject to various uncertainties and risks.

The company require various regulatory approvals and licenses for the purpose of its business. Its inability to obtain such regulatory approvals and licenses for the purpose of its business in a timely manner or at all, or to comply with the terms and conditions of its existing regulatory approvals and licenses may have a material adverse effect on the continuity of its business and may impede its effective operations in the future.

The loss of certain independent certification and accreditation of its products and the manufacturing practices that the company has adopted could impact its business.

Any non-compliance by its Company with the regulatory and sanction regimes of various countries could harm its reputation or result in regulatory action which could materially and adversely affect its business.

The Company is subject to several risks in relation to the arrangements that the Company has entered into with state governments and farmers as a means of securing potential procurement rights to oil palm fruit, one of the key materials for the Company`s ongoing backward integration initiative.

The Company has entered into long-term contracts with third parties for the sale of power which subjects the Company to certain risks.

The company is suject to stringent labour laws. The company engage contract labour for carrying out certain of its operations and the company is responsible for paying amount to the contractor as an arrangement entered into with the contractor. If the independent contractors through whom such workers are hired default on their obligations, this could have an adverse effect on its business, results of operations and financial condition.

Certain of its plants and offices are situated on properties taken on lease. The company cannot assure that such leases will be renewed in the future with favourable terms.

Few of its Promoters, certain Directors and Key Management Personnel are interested in its Company in addition to their normal remuneration or benefits and reimbursement of expenses incurred.

Any damages caused by fraud or other misconduct by its employees could adversely affect its business, results of operations and financial condition.

Some of its Group Companies have incurred losses in the preceding fiscals. The company cannot assure you that these companies or any of its other Group Companies will not incur losses in the future, or that there will not be an adverse effect on its reputation or business as a result of such losses.

Weaknesses, disruptions, failures of cyber security events in the company IT systems could adversely impact its business.

Product innovation and research and development activities are an integral part of its business model. If the company research and product development efforts are not successful, its business may be restricted.

Any contamination or deterioration of its products could result in legal liability, damage its reputation and adversely affect the company business prospects and consequently its financial performance.

If the company were to incur a serious uninsured loss or any product liability claim or a loss that significantly exceeds the limits of its insurance policies, it could have a material adverse effect on the company business, results of operations and financial condition.

The company Promoter and Promoter Group will continue to retain control over its Company after completion of the Issue, which may allow them to influence the outcome of matters submitted for approval of its shareholders.

Environmental concerns may lead to a decline in demand for oil palm products or a decline in oil palm plantations, which may adversely affect its business, results of operations and financial condition.

The availability of spurious, look-alikes, counterfeit products primarily in its domestic market, could lead to losses in revenues and harm the reputation of it products.

A portion of the Net Proceeds, may be utilized for repayment or pre-payment of loans taken from State Bank of India, which is an affiliate of one of the Book Running Lead Managers.

This Draft Red Herring Prospectus contains information from industry sources including the industry report commissioned from Technopak. Prospective investors are advised not to place undue reliance on such information.

The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with its Shareholders.