Patanjali could bail out infra cos via buyouts, JVs

Yoga guru-turnedbusinessman 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 infra firms for support that could be in the form of a buyout or a joint venture, a spokesperson for Baba Ramdev said. In addition, some companies in 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 RBI and the government have been seeking to clean up the banking system by resolving ₹10 lakh crore of bad loans. The RBI has asked banks to start bankruptcy proceedings against 12 companies (most of them infra firms) that together make up a quarter of the bad loans.

Patanjali, which posted revenue of ₹10,561 crore in the year to March 31, from ₹2,006 crore in 2014-15, aims to cross ₹20,000-25,000 crore in sales by March 31, 2018, Baba Ramdev said at a press conference on May 4. Patanjali is a low-debt company, and has so far only $47 million in borrowings, Mint reported on January 19.

“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.

“Patanjali has been vocal about diversification. It (infrastructure) could be part of the plan,” said Abneesh Roy, analyst, Edelweiss Securities Ltd.

Besides infrastructure firms, Patanjali is evaluating companies with distressed assets in sectors like “products for use of common man” such as packaged goods and retail, “health care 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,” said the spokesperson.