**Title: Investing in Patanjali: A Bold Move by GQG Founder Rajiv Jain**
**Introduction**
In a recent move that has raised eyebrows, Rajiv Jain, the founder of investment firm GQG, invested close to $300 million in Patanjali Foods, a business run by the right-wing yoga televangelist Baba Ramdev. Jain defends his decision by emphasizing the potential for growth and dismissing any political angles associated with the investment. This article delves into the details of the investment and explores the reasons behind Jain’s bold move.
**Investing with an Emphasis on Growth**
Jain asserts that his main focus is on ensuring Patanjali Foods continues to sell its range of nutritional supplements, cookies, and ghee to as many people as possible. He believes that prioritizing sales volume over chasing the edge, as pursued by other fast-moving consumer goods companies, is the key to success for Patanjali. Jain argues that this approach differentiates Patanjali from its competitors, whose pursuit of the edge may ultimately become their downfall.
Jain’s support for Patanjali is further evidenced by his admiration for Baba Ramdev’s business acumen. Despite Ramdev’s controversial views on right-wing Hindu causes and homosexuality, Jain highlights the underlying commercial momentum of the business. He notes that Patanjali’s success is not solely dependent on Ramdev’s personality but rather on the professional team that runs the company.
**Patanjali’s Rise in the Indian Market**
Patanjali made its debut in the public market in 2019 when it acquired the bankrupt edible oil company Ruchi Soya Industries. Since then, the company has experienced significant growth and has emerged as a formidable challenger to large consumer goods groups like Hindustan Unilever and Nestlé India. Ramdev, an ambitious figure, has expressed his vision of making Patanjali the greatest fast-moving consumer goods brand in the world by 2025.
Despite facing challenges such as fluctuating prices for edible oils, Patanjali’s food business has witnessed strong revenue growth. In the most recent quarters, Patanjali’s revenue from biscuits, ghee, and health foods increased by 18.5% compared to the previous quarter. Such financial performance has further bolstered Jain’s confidence in his investment decision.
**Investment Challenges and Compliance**
The investment in Patanjali was not without its challenges. Jain mentions that GQG ended up paying more than expected for Patanjali’s shares due to the fierce competition from foreign investors. Additionally, Indian securities laws require that 25% of a listed company’s shares be held by outside investors. To comply with this requirement, Patanjali Foods offered shares for sale. The offering prices ranged from around Rs1,104 per share to Rs1,138.
**Controversies Surrounding Baba Ramdev**
Baba Ramdev’s association with right-wing Hindu causes and his provocative statements have attracted criticism. He has been closely linked to Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP), campaigning alongside Modi during the 2014 national elections. However, Ramdev claimed in 2019 that he had retired politically and would not support any political party.
Ramdev has faced backlash for offensive comments and controversial statements. He was forced to apologize for remarks deemed offensive to women, and a warning was issued to him by the securities regulator. However, Jain argues that such statements do not negate the commercial potential of Patanjali, comparing it to Elon Musk’s controversial statements associated with Tesla.
**Conclusion**
Rajiv Jain’s investment in Patanjali Foods demonstrates his belief in the company’s growth potential and his confidence in Baba Ramdev’s business acumen. Despite the controversies surrounding Ramdev and Patanjali, Jain emphasizes the underlying commercial momentum and the professional team that drives the business. Patanjali’s rise in the Indian market and its strong financial performance further solidify Jain’s investment decision. As Patanjali sets its sights on becoming a global fast-moving consumer goods brand, it remains to be seen how this bold investment will unfold in the years to come.
**Summary**
Rajiv Jain, founder of GQG, invested close to $300 million in Baba Ramdev’s Patanjali Foods, emphasizing the company’s growth potential. Jain believes in the value of selling Patanjali’s products to as many people as possible, differentiating the brand from competitors. Despite controversies surrounding Ramdev’s political associations and controversial statements, Jain stands by his investment decision, citing the expertise of the professional team behind Patanjali’s success. Patanjali’s rise in the Indian market and strong financial performance further support Jain’s belief in the company’s potential.
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GQG founder Rajiv Jain has one main argument when defending investing part of his company’s $93 billion in a business run by a right-wing yoga televangelist with ties to India’s prime minister: growth.
“There’s no political angle,” Jain told the Financial Times after his investment close to $300 million in Baba Ramdev’s Patanjali Foods went public last week.
Instead, Jain said he wants Patanjali to keep selling nutritional supplements, cookies and ghee as fast as possible to as many people as possible rather than following other fast-moving consumer goods companies in their pursuit of the edge — “which I think is their Achilles heel.” he said.
It is the second high-profile investment Jain has made in an Indian firm this year.
In March, GQG invested nearly $2 billion in the embattled conglomerate of infrastructure magnate Gautam Adani, known to have close ties to Prime Minister Narendra Modi, shortly after short seller Hindenburg Research released a scathing report alleging accounting fraud and stock market manipulation. The company denied the claims.
“Just like Adani, there is this negative halo effect to anything related to Modi,” Jain said, adding that India’s current government is the most business-indifferent the country has seen in decades.
Jain said GQG had been watching Patanjali for several years and praised Ramdev’s business acumen. “For a dropout, he’ll rattle the edges in every division and the guy does yoga half the day,” she said. “He’s very impressive.”
Swami “Baba” Ramdev, whose YouTube channel has nearly 10 million subscribers, rose to prominence in India through his televised yoga classes. But he has also sparked controversy for his support of right-wing Hindu causes and views on homosexuality, which he previously called a disease curable with yoga.
Ramdev was also closely associated with Modi’s ruling Bharatiya Janata Party. He campaigned alongside Modi in 2014, helping propel him to victory in national elections and leading crowds in chanting slogans associated with Hindu nationalist ideology. But in 2019, the yogi insisted he had “retired politically” and would not support a party.
“He’s a provocative figure, so he makes these comments, but that doesn’t change the underlying commercial momentum,” Jain said. “There is a professional team underneath that runs the business.”
Patanjali made his public market debut in 2019 when he bought bankrupt edible oil company Ruchi Soya Industries through insolvency. Since then the company has grown significantly and has become a local challenger for large consumer goods groups such as Hindustan Unilever and Nestlé India.
Ramdev’s ambitions extend beyond India. “By 2025, Patanjali will be the greatest [fast-moving consumer goods] brand in the world,” he boasted in a speech at a business conference in 2018. Last year, Ramdev told reporters he planned to list four of the companies in the group, though it’s unclear when that will happen.
Patanjali’s share price is up more than 20% in the past 12 months. The company’s pre-tax profit for the 2022-2023 business year was Rs 11.8 billion (about $144 million), up nearly a tenth from a year earlier.
Patanjali’s latest quarterly earnings were impacted by fluctuating prices for edible oils, its largest unit by revenue. However, his food business, from biscuits and ghee to health foods, recorded revenue growth of 18.5% from the previous quarter to Rs18bn (about $220mn).
GQG holds stakes in other consumer goods companies in India, such as Nestle and Unilever. Jain said the firm ended up paying more than expected for Patanjali’s shares because the company was the target of a competitive bid from foreign investors.
Patanjali Group companies, including “herbo-mineral” maker Patanjali Ayurved, previously held more than 80 percent of Patanjali Food’s shares. However, Indian securities laws require 25% of a listed company’s shares to be held by outside investors, and in March this year, India’s securities regulator Sebi froze trading in Patanjali shares for the infringement.
Patanjali Foods has offered shares for sale to become compliant, with offers ranging from around Rs1,104 per share to Rs1,138, a person familiar with the transaction said.
In addition to posting yoga tips, Ramdev promotes Patanjali Ayurvedic products, from skin care to weight loss tablets.
Ancient Ayurvedic medicine aims to restore balance to a person’s mind and body, rather than focusing on curing disease. After coming to power in 2014, the Hindu nationalist BJP government created an Ayush Ministry to promote Ayurvedic healthcare.
But Ramdev has been in trouble for promoting Patanjali to his admirers earlier and was served with a warning from the securities regulator, the Business Standard newspaper reported, after a video circulated on social media of him claiming the l Buying shares in his company would make his followers millionaires.
Indian media she also reported that Ramdev was forced to apologize last year for saying women “look good when, like me, you’re wearing nothing,” after opposition politicians criticized the remarks as offensive to women.
“I’m sure [Ramdev] he made some statements but i mean who doesn’t? Giain said. “Companies make casual statements, it doesn’t mean the company is no longer a purchase. Look, for example, at Elon Musk.
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