A private equity fund, L Catterton, co-owned by Louis Vuitton (LVMH Moet Hennessy Louis Vuitton SE) has hinted that it is keen to buy a stake in home-grown FMCG brand Patanjali.
Although Baba Ramdev's Patanjali brand has steadfastly maintained that it was against international funds or brands as investors, Catterton's Managing Director was quoted as saying that it would if allowed infuse nearly $ 500 million, in an interaction with The Economic Times.
"We would love to work with him (Baba Ramdev) if we can find a model", said Ravi Thakran, the fund's managing director. The $ 500 million is believed to be half of what Catterton had reserved for investments in Asia.
Patanjali, the Indian 'Swadeshi' brand has until date, shied away from foreign funds, although it does export a significant part of its production to countries as far as the UK and US. The desi FMCG brand has also managed to successfully take on the likes of Hindustan Unilever, Colgate Palmolive, and even Dabur.
So much so that Colgate's marketing has gone a step back, offering free panchangs.
The #BabaRamdev effect. Even multi-nationals like @Colgate are coming up with free panchangs to compete with his unstoppable machine. @yogrishiramdev— Ravi Mantha (@rmantha2) January 4, 2018
Am really proud of him for forcing the firangs to become desi. pic.twitter.com/2rHTeTTS7x
Baba in his million-dollar Aasana
According to Thakran, Catterton's funds can help Patanjali reach more international markets and grow its geographic presence in US, Japan, China, South Korea and even Europe.
Although Catterton's offer may look generous on cards, it must be remembered that the Indian swadeshi brand was valued at $6 billion in 2017.
A few months ago, the ayurvedic manufacturer had roped in two investment banks with an intention to raise nearly Rs 1000 crore. There was reference to an unnamed Hyderabad based boutique firm specialising in fund management in the consumer packaged goods segment during September. There was also speculation about an Initial Public Offering, which was later refused by Acharya Balkrishna, the company's Chief Executive Officer in subsequent media interactions.
In 2016-17, the Patanjali Group reported revenues of Rs 10561 crore, a 111% meteroric rise, besides earning a rating upgrade from ICRA, the rating agency, owing to increasing brand penetration thanks to improved marketing and the loyal fan-following of Yog Guru Baba Ramdev.
Besides food, Baba Ramdev has on several occassions hinted about the group's probable entry into apparel, especially branded women and children wear. There were also suggestions of an expansion of the apparel section through 250 retail outlets. That plan was supposed to go-live from April 2018.
The Vuitton Group, which has interests in apparel, certainly has a lot to gain from the probable investment. But, would our 'Swadeshi' driven home-grown Baba Ramdev say 'Yes' to this $500 million fund? Maybe not, but then again our Yoga Guru is known for his flexibility, is he not?
Here is a twitter response that forces one to ponder...