Baba Ramdev & Patanjali Jump Into Solar Power Business With Rs 100 Cr Investment!
The astronomical rise of Patanjali brand has indeed been amazing.
The astronomical rise of Patanjali brand is indeed amazing: No wonder their co-founder Acharya Balakrishna became India’s 8th richest person in the Hurun List of the Wealthiest India this September, with total assets worth Rs 70,000 crore.
Within a year, his fortunes increased by 170%, and this clearly highlights the success which Patanjali has acquired in the last few years. This current financial year, Patanjali churned out business worth Rs 10,000 crore, and is racing towards their target of Rs 20,000 crore for FY 2018.
Now, brand Patanjali is aiming for some major diversification, and solar energy is that untapped niche which they have decided to take a chance.
As per latest reports coming in, Baba Ramdev led Patanjali will invest Rs 100 crore to go deep into the Solar Energy market, by manufacturing solar equipment.
Acharya Balkrishna, managing director of Patanjali Ayurved said,
“Getting into solar is in line with the swadeshi movement. With solar, each household in India can have power supply, and we are here to make that happen,”
We try to decipher three reasons why Patanjali has decided to delve deep into the niche solar energy market:
Reason #1: China
Recent reports have highlighted that cheap quality Chinese solar panels have entered Indian market, and they are being sold at a reduced rate, which is threatening to sabotage entire solar projects in the country.
Some of the major Chinese manufacturers who are alleged to have been selling low quality Solar products include: Trina Solar Ltd, Jinko Solar, JA Solar Holdings, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd.
Patanjali has been opposing low quality Chinese products since long, and this launch into Solar parts manufacturing seems a perfect fit to their overall plans and vision.
Balkrishna minced no words, when he said:
“This started with our plan to use solar as a source of power at all our factories. That time we understood (that) most of the solar modules come from China. And there was no quality consistency even in India-made ones,”
Hence, opposing Chinese products, and promoting ‘Make in India’ solar products seems a valid reason for Patanjali.
Reason #2: Patanjali Thinks Market is Ripe
The solar power market in India is very hot, and solar products such as solar panels, solar inverters, solar power banks etc are selling like hot cakes.
Recently, a report stated that Indians bought more roof-top solar power capacity in the last year, compared to all 4 previous years combined!
Around 715 megawatts (MW) of systems were added overall via rooftop solar installation in 2017, up from 227 MW last year.
This way, India’s total solar power capacity has now reached 1.3 gigawatts (GW, 1 GW = 1,000 MW). And the reason is cost.
Gautam Bafna, an analyst at CARE Ratings who tracks renewables sector said,
“If a mall is purchasing power from (a) grid at Rs8-9 (per unit)…going by (the) rooftop model, the power cost will be half of that. So it is a viable proposition,”
Hence, Patanjali has clearly understood the market dynamics here, and have launched their new vertical at a very crucia time. With their deep distribution chain in rural India, Patanjali can be expected to make some major dent in the market now.
Reason #3: Competition
Gone are the days when Patanjali used to be the sole provider of organic, Ayurved based products. Now, other Spiritual leaders and communities are also picking up pace, and competition in this niche is increasing.
For instance, Sri Sri Ravi Shankar’s FMCG and wellness brand Sri Sri Tattva is shortly unleash a major drive to project their products as #1 and to grab some market share.
Tej Katpitia, CEO, Sri Sri Tattva said,
“We are launching an exclusive franchise model to open Sri Sri Tattva brand stores that will serve as one-stop shops for consumers looking for authentic, high-quality products in the Ayurveda and herbal health as well as wellness space across categories,”
Sri Sri Tattva, which is basically Art of Living Foundation’s FMCG arm, will now launch 1000 stores pan-India.
Under these circumstances, it makes perfect sense for Patanjali to diversify, and be a step ahead of its competitors.
Do you think Patanjali would be able to make a dent in the solar market? Do let us know by commenting right here!