Tata Consumer Set To Acquire Capital Foods And Organic India: Should Nestle Be Worried?

Tata Consumer Set To Acquire Capital Foods And Organic India: Should Nestle Be Worried?

These acquisitions are strategic moves by TCPL to diversify its taste profile, penetrate new markets, and include organic products appealing to health-conscious consumers.

www.benzinga.comUpdated: Friday, January 12, 2024, 01:06 PM IST
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Tata Consumer Products Ltd (TCPL) is set to expand its portfolio by acquiring Capital Foods Pvt Ltd and Organic India, integrating them into its growing empire. Capital Foods, renowned for its Ching’s Secret and Smith & Jones brands, and Organic India, backed by Fabindia and specializing in organic teas and health products, will reportedly join TCPL’s diverse offerings.

What Happened? These acquisitions are strategic moves by TCPL to diversify its taste profile, penetrate new markets, and include organic products appealing to health-conscious consumers.

As per an ET report, TCPL’s acquisition of Capital Foods involves a 75% stake, valued at ₹3,825 crore, from investors including the Invus Group and General Atlantic, valuing the company at ₹5,100 crore. Capital Foods’ founder Ajay Gupta will retain his 25% stake for now, with plans for a future buyout by Tatas. For Organic India, TCPL aims to acquire a controlling stake for ₹1,800 crore from Fabindia, which holds over 40% in the Lucknow-based company.

Why it matters? The acquisitions mark TCPL’s first significant ventures in several years, focusing on expanding and enhancing its in-house brand portfolio. Capital Foods’ wide range of products, including instant noodles and sauces, will benefit from TCPL’s robust distribution network and marketing expertise. The addition of Organic India aligns with the growing consumer demand for organic and wellness products, a market projected to reach ₹75,000 crore by 2025.

These acquisitions are part of TCPL’s transformation journey from a tea-and-salt company to a broader food and beverage enterprise. The company has recently achieved a market capitalization exceeding ₹1 lakh crore, reflecting its ambitious growth trajectory and strategic market positioning. With these acquisitions, TCPL will compete more fiercely in the food and beverage sector, challenging market leaders and expanding into new, lucrative product categories.

The company has been looking to acquire quite a while. Apart from the above-mentioned, the company was in talks with Bisleri for a takeover and some reports suggested an acquisition of Haldirams.

Price Action: Tata Consumer Products Ltd. shares were up 3.62% at ₹1,159.80, shortly after markets opened for trading on Friday.

(The article is published under a mutual content partnership arrangement between The Free Press Journal and Benzinga)

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