As per the latest records of the company’s finances, Yoga Guru-turned-entrepreneur Baba Ramdev led Patanjali Group has posted a massive turnover of Rs 30,000 crore. Patanjali Ayurved has left behind all the big companies in the Indian FMCG sector, with the exception of Hindustan Unilever Limited (HUL).
Patanjali Ayurved sells everything, from herbal toothpaste and cosmetics to noodles and jams. The FMCG giant is not lost on the latest technology either as it has signed agreements with several e-commerce giants, such as Amazon and BigBasket, to push online sales. Patanjali Group reportedly aims to become the most significant player in the country’s FMCG sector.
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In a recent press release, the Patanjali Group outlined that the company has created history by reaching a turnover of over Rs. 30,000 crore in the financial year 2021 at a time when the entire world is going through an enormous crisis.
The Successful Partnership between Ramdev and Balkrishna
While Ramkrishna Yadav, popularly known as Baba Ramdev, is the mascot of the multi-million empire of Patanjali Ayurved, his number two, Acharya Balkrishna, is the key operative in the company. Ramdev and Balkrishna founded the Divya Yoga Mandir Trust in Haridwar in 1996, and they set up Patanjali Ayurved in 2006. Ramdev’s pupils initially helped set up Patanjali Ayurveda as they loaned him seed fund for the company. Fast forward to 2012, and the company posted a turnover of $63 million, which by 2015–2016 had risen to $700 million.
Balakrishna, whose parents were Brahmins and Nepalese immigrants, now owns 94% of the company and is its Managing Director. Undoubtedly, he is a close aide of Ramdev’s. Balakrishna was also voted one of India’s 50 Most Influential People in 2020. According to Forbes India, Balakrishna is India’s third-youngest billionaire as of 2020, with a real-time net worth of $2.3 billion.
Selling Swadeshi and Marketing Nationalism
Before entering the business world, Ramdev established himself as the de facto Yoga Guru of India. He showed the actual value of this traditional art and his desire to bring it to the general public. With years in the making, Ramdev built the brand of Patanjali Ayurved on the heightened sense of Swadeshi, increasing popularity of yoga, and the inherent by-product of these – nationalism.
Over the years, Ramdev has transformed Patanjali Ayurved into an Indian multinational and one of the biggest FMCG companies based out of Haridwar, a critical religious spot for North Indian Hindus. To create his market, he spurred an awakening among the consumers with the call for Swadeshi nationalism to promote herbal and Ayurvedic products to counter the flight of money apparently “looted” by international MNCs operating in India.
And thus, his ascent into India’s most prominent business circles began as people overwhelmingly shifted to Patanjali’s natural and herbal products.
Today, the Patanjali Group is on track to becoming the most significant FMCG player in the country, set on overtaking Hindustan Unilever. The company crossed the Rs 30,000-crore revenue mark in 2020-21 compared to HUL’s revenues of Rs. 45,311 crore.
Patanjali’s Money Minting Subsidiaries
Patanjali acquired Ruchi Soya for Rs. 4,390 crore ($610 million) through bankruptcy proceedings in 2019. Ruchi Soya’s sales in FY 2021 were Rs. 16,318 crore, which accounted for 54% of Patanjali’s total sales for the fiscal year. On an annual basis, the increase in Patanjali’s revenue was 24.4%. Additionally, the company’s EBITDA margin increased by 122.27% to Rs. 1,018 crore, and Profit after Tax (PAT) increased 204.01% to Rs. 681.0 crore.
In FY 2020-21, with Patanjali Ayurved Limited’s turnover of Rs 9,783.81 crore, Patanjali Natural Biscuit (Rs. 65 crore), Divya Pharmacy (Rs 850 crore), Patanjali Agro (Rs 1,600 crore), Patanjali Parivahan (Rs 548 crore), Patanjali Gramodhyog (Rs 396 crore), Patanjali Group’s turnover increased by over Rs 14,000 crore.
What can entrepreneurs learn?
Aspiring entrepreneurs can undertake a multi-pronged strategy to ideate and scale up their business idea. They must plan expansively for the future to ramp up marketing spending, enter new categories, and predict a good market positioning, just like Patanjali has in India’s food, FMCG and wellness products segments.
While the story of Patanjali Ayurved and Ramdev’s business acumen seems rare, the practise of cashing in on sentimental issues and giving alternatives to monopolised sectors is common in the business world. From this story, new businesses and aspiring entrepreneurs must learn to make the best out of opportunities and give new options to consumers, and thus, write their own entrepreneurial story.
