YOGA GURU Swami Ramdev is as at ease in talking about revenues and profits, as he is in twisting his lithe and supple frame into an asana. Having taken sanyas in 1995, Ramdev, who prefers to be referred to as the Mentor and Spiritual Head of the Patanjali group, pulls no punches when it comes to taking on multinational companies in the FMCG space.
As part of that ambition, Patanjali Foods Ltd (erstwhile Ruchi Soya Ltd) has acquired the home and personal care business of Patanjali Ayurved Ltd for 1,100 crore, and a 20-year licensing arrangement for a 3% turnover-based fee. The deal aims to strengthen the company's position in the fast-moving consumer goods sector.
In an interaction with Business Today TV, Ramdev speaks about his plans to expand the Patanjali business empire in the years to come.
Edited excerpts:
What is the rationale for the acquisition?
We are reaffirming our commitment to becoming a major player in the FMCG space. Two years ago, at the time of our FPO (follow-on public offer), we had set an ambitious five-year target of attaining a 50:50 split between the two major verticals-edible oils and FMCG. I am saying ambitious, because the share of FMCG in the total revenue was only 6-7% in FY22. In FY23, it rose to 19-20% and in the recent financial year, it went above 30%.
With the acquisition, we are consolidating the 'Patanjali' brand FMCG products portfolio. We see multiple synergies in terms of brand equity, product innovation, cost optimisation, infrastructure and operational efficiencies. This will also have a positive impact on market share, revenue and earnings.
Will you look at more acquisitions?
We will acquire domestic brands first, and later, foreign FMCG brands.
There is a trend towards 'premiumisation' in the FMCG space. How does Patanjali plan to maintain its market position given the strong competition from global majors?
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