French luxury major to invest $500mn in Ramdev's Patanjali
Mumbai - Patanjali will be able to sell its products in the US, Japan, China, South Korea and Europe markets
By Web Report
Published: Mon 15 Jan 2018, 11:12 AM
Last updated: Mon 15 Jan 2018, 1:18 PM
The French luxury group LVMH stated that it is inclined to pump $500 million to buy a stake in Baba Ramdev's Patanjali which has emerged as India's biggest fast-moving consumer goods (FMCG) companies.
And, if all turns out well, the L Catterton private equity fund co-owned by LVMH will invest almost half of its remaining Asia fund and back the ayurveda-based product manufacturing enterprise.
This would mean that Patanjali will be able to sell its products in the US, Japan, China, South Korea and Europe markets with the help of L Catterton.
"We would love to work with him if we can find a model. However, I know his model is not to work with multinationals and with foreign money," said Ravi Thakran, managing partner, L Catterton Asia.
The surging demand for Patanjali products have forced global and local rivals including Hindustan UnileverBSE -0.20 %, Colgate PalmoliveBSE 0.14 % and Dabur to ramp up their ayurvedic portfolio.
"Patanjali has the potential to go to the world and I can tell you today that Patanjali has been a disruptor in its category, as strong a disruptor as many of the global disruptors are and it has taken Indian-ness and celebrated it with pride," Thakran was quoted in ET.
Though Patanjali is currently looking for funding, LVMH buying a stake in the enterprise is a hard deal to crack as Ramdev has positioned Patanjali as 'swadeshi' and anti-multinational.
Patanjali chief executive Acharaya Balkrishna said the company is not looking to dilute equity but is seeking about Rs 5,000 crore in loans in 'Indian currency' at rates that are lower than those offered by banks.