Patanjali is seeking Rs 5000 crore in loans but will not dilute any stake in the company and will accept funds only in Indian rupees.

French luxury group LVMH ready to invest 500 million in Baba Ramdevs PatanjaliImage source: Facebook
Atom Investment Thursday, January 11, 2018 - 23:02

After creating a storm in the FMCG industry in Indi, Baba Ramdev-led Patanjali Ayurved has caught international attention. Patanjali is reportedly in talks with various venture funds and is looking to raise around Rs 5000 crore in loans for its ongoing projects and its manufacturing units.

But what has caught the attention of the industry is the interest of French luxury group LVMH, which runs the brand Louis Vuitton in the Ayurveda major.

An Economic Times report on Thursday states that L Catterton private equity fund co-owned by LVMH is ready to invest $500 million, which is almost half of its remaining Asia fund, in order to pick up a stake in what is currently the most talked-about and the fastest growing FMCG company in the country.

According to a report in Financial Express, the company has held several meetings with fund managers in Mumbai, which Patanjali Managing Director Acharya Balkrishna confirmed to FE.

However, Acharya Balakrishna has reportedly said that as per the company’s policy, it will accept funding on its own terms where it will not part with any stake or share in the company and wants the loan at an interest rate that is lower than what banks offer. And it will accept the investment only in Indian rupees.

“Our terms are very simple that we would not allot any share or stake of Patanjali to them. We want the money simply in the form of loan, which should have lower interest rate than that of bank,” FE quotes Balkrishna as saying.

ET quotes Ravi Thakran, managing partner of L Catterton Asia as saying that the fund would love to work with Patanjali if a feasible model could be worked out. The firm wants to help Patanjali take its products global to markets such as US, Japan, China, South Korea and Europe.

"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," Ravi told ET.

Adding new product segments as it grows, Patanjali now looking to raise fresh funds to set up plants in Nagpur, Greater Noida, Assam, Chhattisgarh, Andhra Pradesh, Telangana, Haryana and Rajasthan and for the cultivation of aromatic and herbal plants on 10,000 acres of leased land in Arunachal Pradesh.