Tata Consumer's Big Bet: Board Greenlights Acquisition Of Capital Foods And Organic India

tata consumer’s big bet: board greenlights acquisition of capital foods and organic india

In a significant move aligning with its growth strategy, Tata Consumer Products has obtained approval from its Board of Directors for the acquisition of 100% of the issued equity share capital of Capital Foods Private Limited. The decision was made at a meeting on January 12, 2024 to expand its market presence and diversifying its product portfolio.

The acquisition is set to be executed through a Share Purchase Agreement (SPA) and Shareholders’ Agreement (SHA) with the current promoters and shareholders of Capital Foods. The phased acquisition will be subject to the fulfillment of various terms and conditions outlined in the SPA and SHA, marking a pivotal moment for Tata Consumer Products.

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Capital Foods Private Limited, a key player in the Indian market, specialises in the manufacturing and sale of packaged food and condiments. The company is recognised for its popular brands, ‘Ching’s Secret’ and ‘Smith & Jones,’ offering a range of products including chutney, masala, sauces, noodles, and soups.

The paid-up share capital of Capital Foods stands at Rs. 34,996,190, divided into 3,499,619 Equity Shares of Rs. 10 each. With an estimated turnover of approximately Rs. 750 to 770 crores for the fiscal year 2023-24, Capital Foods brings a robust financial profile and market presence to the Tata Consumer Products portfolio.

The acquisition cost, or the price at which the shares are being procured, amounts to INR 5,100 crores. This figure represents the enterprise value on a ‘no cash/no debt basis’ for the entire 100% stake in the Target Company.

The completion of this strategic acquisition is contingent upon meeting the stipulated terms and conditions within the SPA and SHA. The details required by Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the relevant SEBI Circular, have been enclosed for transparency and compliance purposes.

As per the company’s filing on the NSE, ‘Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), this is to inform that, at its meeting held on January 12, 2024, the Board of Directors approved the acquisition of 100% of the issued equity share capital of Capital Foods Private Limited (‘Capital Foods’ or ‘Target Company’). The Company, thereafter, has entered into Share Purchase Agreement (‘SPA’) and Shareholders’ Agreement (‘SHA’) with the existing promoters and shareholders of the Target Company to acquire the entire issued equity share capital in a phased manner.’

Tata Consumer Products And Organic IndiaAlso, Tata Consumer Products has officially inked definitive agreements to secure up to 100% of the issued equity share capital of Organic India, an esteemed brand renowned for its ‘better for you’ organic offerings in Food & Beverages and Herbal & Traditional Supplements. With a rich offering of over 100 products in the Health & Wellness domain, Organic India has emerged as a trailblazer in the field.

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The Total Addressable Market for the categories within Organic India’s purview stands at Rs 7,000 crores in India and an impressive Rs 75,000 crores in international markets, where Tata Consumer has a robust presence.

On Friday, the shares of Tata Consumers closed at Rs 1,154.10, up 3.11 per cent from the previous day’s closing. The 52 week high and low of the share is Rs 1,165.55 and Rs 686.60 respectively.