Patanjali needs to borrow ₹5,000 cr: Ramdev
NEW DELHI: Yoga guru-turnedbusiness man Baba Ram devon Wednesday said his company Patanjali Ayurved Ltd will need to borrow ₹5,000 crore to expand production capacity to support growth as it aims to become the largest packaged goods company in the country by March 2019.
“Patanjali’s revenue will be more than HUL’s (Hindustan Unilever Ltd) in 2018-19. To support this growth, we’ll need to borrow over a period of time,” Ramdev said, adding that his dream is to emerge as the “largest packaged goods company in the world by 2020-21”.
Ramdev’s target looks scarcely credible. Hindustan Unilever, the country’s largest packaged goods company, has reported revenue at ₹34,487 crore in the year ended March 31, 2017, according to the company’s filings. In comparison, Ramdev’s Patanjali posted revenue of ₹10,561 crore during the same year, doubling from around ₹5,000 crore the previous year.
Ramdev, however, had said at a press conference on May 4, 2017, that Patanjali’s sales will double by March 31, 2018. He said Patanjali has the potential to cross a “turnover of ₹1 lakh crore in the next 3-4 years”.
“Patanjali has the potential to become a ₹2 lakh crore company,” said Ramdev, speaking at an event organised by the All India Management Association.
Patanjali, which currently has very low debt of around ₹300 crore, is in discussions with banks for loans. However, the company is unlikely to go for “structured debt or an equitylinked fund-raise option”, clarified a spokesperson of the company.
Mint had on September 22 reported that Patanjali has hired investment bankers to raise ₹1,000 crore and is weighing equity-linked fundraise options.
In the next two years, Ramdev said, Patanjali will have its own manufacturing units across the country that would cumulatively be capable of producing goods worth ₹1 lakh crore per annum. During the past year, Patanjali has announced plans for setting up more than 15 factories across the country.
Getting loans, however, may not be an issue for Patanjali, given its liquidity and growth rate. Credit rating agency Icra Ltd, in January, upgraded Patanjali’s credit rating on strong performance and increasing brand penetration, among other reasons. During the past year, Patanjali has accelerated its pace of diversification. After packaged food, Ayurvedic medicines and cosmetics, Ramdev’s company last month announced its foray into the private security business and the branded apparel market.