In an analyst call, Sunil D’Souza, the Managing Director and CEO of Tata Consumer Products Ltd, addressed concerns and reassured stakeholders that there are no plans to rebrand Ching’s Secret, Smith & Jones, and Organic India. According to a report by The Financial Express (FE), D’Souza responded to investor queries regarding the acquisitions of Capital Foods and Organic India, emphasizing the company’s commitment to upholding the continuity of the acquired brands.
Tata Consumer is set to acquire a controlling stake in Organic India from Fabindia at a valuation of INR 1,800 crore and a 75% stake in Capital Foods from Invus Group and General Atlantic at INR 5,100 crore. These strategic acquisitions are intended to fortify Tata Consumer’s portfolio and enhance its competitive position in the Indian market.
Continue Exploring: Tata Consumer Products seals INR 7,000 Crore dual acquisition, adding Capital Foods and Organic India to portfolio
Organic India specializes in teas, infusions, herbal supplements, and personal care items, whereas Capital Foods is recognized for its offerings of instant noodles, soups, and condiments under the brands Ching’s Secret and Smith & Jones. Tata Consumer intends to capitalize on the global reach of both brands, aligning with its strategic goal to evolve into a prominent FMCG company.
D’Souza clarified that the inclusion of the Tata name in the acquired brands would undergo a meticulous evaluation process, highlighting the successful integration of the Tata name with the Soulfull brand, which was acquired in 2021. Tata Consumer is actively pursuing its transformation into a major fast-moving consumer goods (FMCG) company, with a dedicated emphasis on both organic and inorganic growth initiatives.
In terms of financing for the recent acquisitions, Tata Consumer is considering various alternatives. The company is reported to have INR 3,000 crore in cash, and the remaining balance of INR 4,000 crore may be secured through a combination of short-term debt and a proposed rights issue amounting to INR 3,500 crore. The final approval for the rights issue is anticipated during a Tata board meeting scheduled for January 19.
Continue Exploring: Tata Consumer Products to fund Capital Foods and Organic India deals with cash reserves, bridge financing
The consolidated turnover for the company in the financial year 2022-23 amounted to INR 13,783 crore. D’Souza articulated Tata Consumer’s ambitions to play a substantial role in the food and beverages sector, highlighting a strategic focus on exploring value-accretive inorganic opportunities that grant access to rapidly expanding categories.
D’Souza conveyed that the Capital Foods transaction is set to conclude within the next two weeks, whereas the Organic India acquisition is expected to be finalized in approximately 45-60 days. The integration strategy entails strategically positioning both Capital Foods and Organic India within Tata Consumer’s current platforms to align with their specific product portfolios. This integration plan encompasses a concentration on breakfast and mini-meals for Capital Foods, the pantry business for Smith & Jones sauces and pastes, and a focus on premium teas for Organic India’s tea and infusion offerings.
Continue Exploring: Tata Consumer Products to tap pharma channels with Organic India and expand Capital Foods into oriental cuisine space