Ramdev says Patanjali to be a notforprofit entity
FUTURE PLANS We’ll not list Patanjali on the stock exchanges: Yoga guru
NEW DELHI: Yoga guru-turned-business-man Bab a Ram dev said Patanjali Ayurved Ltd will be turned into a “non-profit” entity as it seeks to plough back earnings from its businesses into charity. “We will not list Patanjali on the stock exchanges. We will list Patanjali in people’s hearts. We are transforming Pat anj ali into anon-profit organization ,” Ram dev said on the sideline sofa press conference. Pa tanjali has, since its inception, used all profits generated from business for charity, he added.
Patanjali Ayurve di sa privately held company that is 98.6% owned by Ramdev’s close aide Acharya Balkrishna, who was ranked the 19 th rich est Indian by Forbes in 2017 with an estimated net worth of $7.3 billion. Ramdev does not directly own shares in the company.
As a first step, Ramdev has set up a charitable organization— Pat anj ali Se va Trust—which will be the sole holding entity for all companies that are part of the Patanjali Group, according to a group executive who did not want to be named. There are a few dozen registered firms in the Patanjali Group.
While Pat anj ali Ayurv ed manufacture sand sells a host of consumer packaged goods—from pulses to ghee, biscuits to shampoo, juices to anti-ageing cream s—the group has interests in a bunch of other businesses, including educational institutes, ayurvedic medicine sand hospitals, to name a few. The company has also expressed interest in entering new areas such as infrastructure, solar power and apparel, among others.
There could be several reasons why Ram dev has setup Pat anj ali Seva Trust as the holding entity. “It could be an exercise to avoid inheritance tax that the government may impose in the future. A trust as a holding entity ensures succession of the firm’s assets, wealth preservation in perpetuity,” said Radhika Jain, partner, Grant Thornton India Llp.
Pr an av Say ta, tax partner, E Y, said just turning Patanjali Ayurved into a trust will not by itself give much of a tax advantage. “But if income generated from commercial operations is used in charitable causes as a set objective of the entity, the tax advantage is huge,” he said.
According to the Patanjali executive cited above, Ramdev has written a ‘Will’ for Patanjali group companies ensuring succession .“Ownership of Pat anj ali can never be transferred to anyone other thana‘s any asi’ (r enunciate ). The Trust structure is to ensure future of the business empire. After the demise of Bab a Ramdev and Acharya Balkrishna, the company will be owned and run by san ya sis only ,” the executive said.
In a statement, Ramdev said Patanjali’s main aim behind its activities was to do charity works of“over ₹1 lakhcro re” in areas of education, health, yoga, ayurved, research ,gau-seva (cowwelfare) and services to the common man. “We have undertaken charity works to the tune of over ₹ 11,000 crore,” the statement added.
To be sure, the profit that Pat anj ali Ayurvedh as generated from its business so far is likely to be far less. In the year ended 31 March 2017, Pat anj ali doubled its revenue to ₹10,561 crore from ₹5,000 crore in the previous year. Patanjali’s meteoric rise was in the last two to three years. Its revenue jumped from ₹446 crore in 2011-12 to ₹2,006 crore in 2014-15.