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Baba Ramdev’s Patanjali Ayurved is pumping money into businesses with zero operations

Patanjali Ayurved Ltd (PAL), co-founded by yoga guru Baba Ramdev, has reportedly pumped some Rs 325 crore into several subsidiaries and group affiliates over the years, but “many” of those entities don’t have commercial operations.

While there is nothing uncommon about investing in subsidiaries or affiliates, “investments in businesses with zero operations and at a premium” raises a red flag, reported.

A case in point is the east Delhi-based Verve Corporation, supposedly controlled by Patanjali Ayurved.

“Verve is part of a byzantine collection of subsidiaries that PAL has invested nearly Rs 325 crore in recent years. PAL has as many as 21 private limited companies and 26 partnership firms listed under ‘disclosures of transactions between related parties’ in which it has a controlling stake,” according to, which said it reviewed hundreds of documents and regulatory filings by the company.

And company records apparently show that only four PAL subsidiaries have operations.

“Many of these entities have three things in common… they have no commercial operations. The only income they earn is through interest on funds parked in banks or any other financial instrument. Two, they have been incorporated through a maze of transactions. Three, they underwent at least one name change,” the website added.

PAL faces head-winds

PAL, which has relied on Baba Ramdev’s popularity to build a brand in record time and boost sales, has been hailed a disruptor in the fast moving consumer goods (FMCG) space. However the firm is reportedly battling head-winds.

PAL grew its turnover from around Rs 2,000 crore in 2014 to Rs 10,000 crore in 2017. But, in fiscal 2018, revenues were flat. And a bigger concern for the homegrown FMCG maker is that consumer off-take has declined, The Times of India reported earlier in the month, citing a Credit Suisse study on PAL.

But PAL boss Acharya Balkrishna has rejected those findings. He told ThePrint: “…I agree that we faced a slump after the introduction of Goods and Services Tax (GST) but the entire industry was then impacted. There is no impact on consumer off-take. In fact, we are unable to increase the supply of our products to match the excessive demand.”

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