New Delhi: Yoga-guru-turned-businessman Baba Ramdev’s Patanjali Ayurved Ltd may emerge as a white knight riding to the rescue of infrastructure companies weighed down by stressed assets.
Patanjali Ayurved, which has disrupted the packaged consumer goods industry with its rapid growth in the past few years, has been approached by some infrastructure firms for support that could be in the form of a buyout or a joint venture, a spokesperson for Ramdev said.
In addition, some companies in the sectors in which Patanjali already has a presence have also approached it, the spokesperson added.
Besides its main business of packaged consumer goods, Patanjali has a presence in retail, education and healthcare (Ayurveda). The company manufactures and sells everything from shampoo and toothpaste to biscuits and noodles, and rice and wheat to honey and ghee.
At the core of Patanjali’s investment philosophy, if it indeed opts to purchase any of the stressed assets, be it infrastructure or any other sector, will be swadeshi.
“We are always ready to help companies, if needed, but it has to align with the swadeshi movement. We have been approached by a lot of such companies in different sectors. We’ll only support the home-grown companies, especially those under stress, if it is needed and if we see we can make things better. That would strengthen our swadeshi movement,” said the spokesperson.
The Reserve Bank of India (RBI) and the government have been seeking to clean up the banking system by resolving Rs10 trillion of bad loans.
RBI has asked banks to start bankruptcy proceedings against 12 companies (most of them infrastructure firms) that together make up a quarter of the bad loans.
Patanjali, which posted revenue of Rs10,561 crore in the year to 31 March, up from Rs2,006 crore in 2014-15, aims to cross Rs20,000-25,000 crore in sales by 31 March 2018, Ramdev said at a press conference on 4 May. Patanjali is a low-debt firm, and has so far only $47 million in borrowings, Mint reported on 19 January.
“We are seeing interest from pharmaceuticals and FMCG (fast-moving consumer goods) firms in the stressed assets play,” said a Delhi-based analyst with a consulting firm, requesting anonymity.
“Patanjali has been vocal about diversification. It (infrastructure) could be part of the plan,” said Abneesh Roy, an analyst with Edelweiss Securities Ltd.
Besides infrastructure firms, Patanjali is evaluating companies with distressed assets in sectors such as “products for use of common man” such as packaged goods and retail, “healthcare and wellness, education and firms that are engaged in protection and welfare of cows”, said the spokesperson.
Patanjali may opt for acquisitions or joint ventures or may just offer financial support in the form of an investment.
“We have invested in such companies (with distressed assets) before as well,” added the spokesperson.
In October, Patanjali had bought a rice mill owned by RH Agro Overseas (P) Ltd in Sonipat for Rs70 crore.
In February this year, it signed a three-year deal with edible oil processing company Ruchi Soya Industries Ltd, which was under stress with debts of about Rs10,000 crore at that time, for processing and packaging of its soya, sunflower and mustard oils.
“There have been a few more,” said the spokesperson, declining to reveal names.
Interestingly, the first acquisition by Patanjali was not a home-grown company. It had, in 2011, acquired California-based herbal firm Naturomic Llc which was rechristened Herboved Inc., a subsidiary of Patanjali Ayurved.