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10 stunning facts about Baba Ramdev’s Patanjali Ayurved

Patanjali Ayurved, maker of ayurvedic consumer products, is the fastest growing consumer company in India. Yes, you heard it right. Credit Lyonnais Securities, a foreign stockbroking company, has put out a report wishing for the company promoted by Baba Ramdev, the yoga guru, to be listed on the stock market. 

Here 10 takeaways about the company: 

1. What is Patanjali Ayurved: This is a company formed by Baba Ramdev in 1997. He collaborated with Acharya Balkrishna, a scholar of Ayurveda, Sanskrit and Vedas in 1990s to manufacture ayurvedic medicines. Ramdev focused on Yoga while Balkrishna assumed responsibility of spreading Ayurveda medicine. 

2. Revenue: Patanjali Ayurved is perhaps the fastest growing fast-moving-consumer-goods firm in India with annual revenues reportedly at more than Rs 2,000 crore. Ramdev is reported to have said in one of the interviews ithat he expects to take the revenue to Rs 10000 crore. 

3. Discount and profits: Credit Lyonnais obersves that most of Patanjali products are available at an attractive discount to competition. The company sources products directly from farmers and cuts on middlemen to boost profits. It makes 20% operating profit. This is the difference between total income and expenditure. 

4. Ownership: Baba Ramdev does not hold any stake in Patanjali Ayurveda Ltd. Balakrishna is believed to own 92%. The balance 8% stake is held by Sarwan and Sunita Poddar, a Scotland-based non-resident Indian couple. The two are associated with the UK Trust of Patanjali and have donated land in UK. 

5. Food park: Patanjali Food and Herbal Park was established in 2009 under the food park scheme of the Indian government. The company reportedly commissioned one of the largest food parks in the world at a total investment of Rs 500 crore. The food park is spread across 100 acres and provides employment to over 6,500 people. 

6. Distribution: Patanjali products are sold through three types of medical centres. These include Patanjali Chikitsalaya which are clinics along with doctors, Patanjali Arogya Kendra which are health and wellness centres and Swadeshi Kendra, non-medicine outlets. A typical Patanjali centre is 500 to 1,500 square feet in size. The group has 15,000 exclusive outlets across India. They plan to grow to 1,00,000 outlets in next few years. They also distribute through general retail stores. 

 7. Store profits: Patanjali has 5,000 franchisee stores. Retailers told CLSA that their average gross turnover is Rs 25,000 every day. Profit margins for retailers are 10-20% across product categories. 

 8. Word of mouth publicity: Consumer companies typically spend 12-20% of revenue on advertising and promotions. When a new company gets into the business, this spending is significantly higher. Patanjali has followed a unique word of mouth publicity model and the entire revenue is without any advertising. 

9. Advertising agency appointed: Things are changing though. Patanjali has hired two top advertising agencies McCann and Mudra to prepare the business for the next phase of growth. 

10. FMCG competition: The company is privately held and profitable. The revenue for 2014-15 of Patanjali Ayurved is bigger than Jyothi Laboratories, the maker of Ujaala and Emami. These brands have been in business for decades.