Tata Consumer Products approves INR 6,500 Crore fundraising for Capital Foods and Organic India acquisitions

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January 19, 2024

Tata Consumer Products announced on Friday that its board of directors has considered and approved a fundraising initiative of up to INR 6,500 crore. According to a regulatory filing, the company plans to raise funds through the issuance and allotment of Commercial Papers, capped at INR 3,500 crore. Additionally, the approval includes the raising of funds by issuing equity shares with a face value of INR 1 each through a rights issue, not to exceed INR 3,000 crore.

“For the purposes of giving effect to the rights issue, the detailed terms to the rights issue including but not limited to issue price, rights entitlement ratio, record date, timing and terms of payment will be determined in due course by the Board, or the ‘Capital Raising Committee’ constituted by the Board, in accordance with applicable laws, subject to receipt of necessary approvals, as may be required,” it said in the exchange filing.

Tata Consumer Products said that the funds totaling INR 3,500 crore are earmarked for bridge financing, aimed at facilitating the payment of consideration for the proposed acquisition of stakes in Capital Foods Private Limited and Organic India Private Limited.

Continue Exploring: Tata Consumer Products to fund Capital Foods and Organic India deals with cash reserves, bridge financing

Earlier on January 12, Tata Consumer Products announced the signing of definitive agreements to acquire 100 percent equity shares of Capital Foods, the owner of well-known brands ‘Ching’s Secret’ and ‘Smith & Jones,’ in a phased manner. The initial acquisition will include 75 percent of the equity shareholding, with the remaining 25 percent to be acquired over the next three years. This strategic announcement is geared towards expanding Tata Consumer Products’ product portfolio and fortifying its pantry platform. The estimated overall size of the categories in which Capital Foods operates is INR 21,400 crore.

Continue Exploring: Tata Consumer Products set to expand portfolio with strategic acquisitions of Capital Foods and Organic India

Sunil D’Souza, MD & CEO, Tata Consumer Products, had said, “We believe this is a good strategic and financial fit. It will open up significant market opportunities in the fast-growing non-Indian cuisines segment, leveraging the sales and distribution platform that we have built. The strong brand recall of Ching’s Secret and Smith & Jones coupled with our operational strength across channels makes us extremely confident of driving topline growth and realizing cost synergies. This transaction will accelerate momentum in our business and is margin accretive to our business.”

On the same date, Tata Consumer Products also announced that it had entered into definitive agreements to acquire up to 100% of the issued equity share capital of Organic India. This strategic move is in line with Tata Consumer’s overarching goal of expanding its product portfolio and increasing its presence in rapidly growing and high-margin sectors. The acquisition is set to establish a Health & Wellness platform for Tata Consumer Products. Notably, the Total Addressable Market for the categories in which Organic India operates is valued at INR 7,000 crore in India and INR 75,000 crore in international markets, where Tata Consumer already boasts a strong foothold.

IndiaMART reports 27% YoY decline in Q3 net profit to INR 82 Crore, despite 21% rise in operational revenue

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January 19, 2024

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IndiaMART InterMESH, a B2B marketplace, experienced a 27.4% decrease in its combined net profit, totaling INR 82 crore in the third quarter (Q3) of the financial year 2023-24 (FY24). This decline, compared to the INR 112.8 crore reported in the same quarter of the previous year, can be attributed to subdued growth in the current period.

Nevertheless, IndiaMART witnessed an 18.8% quarter-on-quarter (QoQ) rise in net profit, reaching INR 69 crore in the preceding quarter, Q2 FY24.

The operational revenue surged by 21%, reaching INR 305 crore in Q3 FY24 compared to INR 251 crore in the corresponding quarter of the previous year. Nevertheless, the quarter-on-quarter (QoQ) growth was modest, standing at 3.4% from INR 295 crore in Q2 FY24.

It’s important to highlight that IndiaMART exhibited a robust financial performance in Q3 FY23, achieving a 61% year-on-year (YoY) increase in net profit and a 34% growth in operating revenue.

In the reported quarter, the company observed a modest 9% year-on-year (YoY) increase in paying subscription suppliers, reaching 2.12 lakh. This growth was attributed to the addition of 1,826 such suppliers during the period.

IndiaMART’s Indian supplier storefronts recorded a 5% year-on-year increase, reaching 7.8 million in the third quarter of fiscal year 2024. Concurrently, the platform’s traffic also grew by 9% year-on-year, totaling 272 million. Notably, unique business inquiries showed a 4% rise, reaching 23 million in the same Q3 FY24 period.

Dinesh Agarwal, the CEO of IndiaMART, expressed that the third quarter saw the company achieving moderate growth in both revenue and deferred revenue, along with maintaining robust operating margins. He remains optimistic about the sustained profitability and positive cash flows, citing the company’s strategic utilization of market opportunities amid the growing digital adoption by businesses.

“We continue to focus on enhancing customer experience on our platform and drive deeper penetration of paying customers across cities, enabling businesses to grow online,” Agarwal added.

Meanwhile, IndiaMART witnessed a nearly 20% surge in expenses during the reported quarter, with spending reaching INR 230 Cr compared to the INR 192 Cr total expenses in Q3 FY23.

The largest portion of expenses was attributed to employee benefit costs, experiencing a 27.9% year-on-year increase to reach INR 138.5 Cr in Q3 FY24.

After the release of quarterly earnings, IndiaMART’s shares concluded Thursday’s (January 18) trading session with a 3.4% decline, closing at INR 2,511 on the BSE.

Continue Exploring: IndiaMART InterMESH records 2% growth in Q2 FY24 earnings, despite 17% net profit decline; operational revenue surges by 22%

Govt considers franchise route to boost Bharat-branded product sales, plans 50 outlets in Delhi

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January 19, 2024

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The government is looking to leverage the franchise route for directly selling Bharat-branded products to consumers, as revealed by a senior official in a report on ET.

It will also utilize mass media to raise awareness about its initiative, wherein it provides subsidized kitchen essentials like onions, pulses, and flour directly to consumers.

“We are looking at opening 50 stores across Delhi,” the official said. The government is looking for someone to manage and operate the everyday operations of these stores, the official added.

Last month, the government inaugurated its first two stores at Delhi’s Rajiv Chowk metro station, strategically positioned to capitalize on the high footfall it receives. These establishments, owned by the National Cooperative Consumers’ Federation of India (NCCF), procure agricultural commodities such as food grains, pulses, spices, oilseeds, onions, and various consumer goods on behalf of the government, offering them to consumers at reasonable rates.

Continue Exploring: Govt to establish subsidized staple food outlets at Delhi metro stations, potential expansion to other cities

Plans are underway to promote the stores through radio broadcasts and announcements at metro stations, aiming to enhance consumer awareness. Additionally, the official mentioned a proposal to award prizes for every hundredth purchase made through digital transactions.

Through the establishment of these stores, the government aims to extend its outreach to a broader consumer base, facilitating their access to subsidies provided as part of its price intervention scheme aimed at mitigating food inflation.

Continue Exploring: Chana Dal goes affordable with the launch of government’s ‘Bharat Dal’ brand

BL Agro announces INR 500 Crore investment in Telangana, signs MoU with govt to establish manufacturing unit for Nourish brand products

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January 19, 2024

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BL Agro is set to invest INR 500 crore in Telangana and has signed an initial agreement with the state government to establish a manufacturing plant for various food products. The company, in a statement, announced that it has signed a Memorandum of Understanding (MoU) with Telangana Chief Minister Anumula Revanth Reddy to set up a manufacturing unit in the state.

The Memorandum of Understanding (MoU) was recently signed during the World Economic Forum held in Davos, Switzerland.

“Under the MoU, the company plans to invest INR 500 crores in Telangana and employ 5,000 people,” BL Agro said.

The upcoming manufacturing facility will be involved in the production of the complete spectrum of Nourish brand products, including wheat flour, pasta, vermicelli, spices, papad, etc. Additionally, it will manufacture rice bran and cottonseed oils.

“It is a moment of pride for us as a Group company to sign an MoU with the Telangana government and expand our footprints in the Southern part of the country,” Ashish Khandelwal, Managing Director, BL Agro said.

As per the terms set forth in the Memorandum of Understanding (MoU), BL Agro, in conjunction with its affiliate company Leads Connect Agritech, is set to establish an agricultural value chain in the state through its initiative ‘Khet Se Kitchen Tak.’ This initiative is aimed at supporting the farming community and agribusinesses, with the goal of enhancing productivity and sustainability in the agriculture sector.

Situated in Bareilly, Uttar Pradesh, BL Agro Industries Ltd is a key player in the Indian market, specializing in branded edible oils and various other food products.

Continue Exploring: FMCG giant BL Agro invests INR 500 Cr in agritech startup Leads Connect for strategic expansion

Allied Blenders files IPO papers with SEBI, targeting INR 1,500 Crore capital raise

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January 18, 2024

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Allied Blenders and Distillers Limited (ABD)

Allied Blenders and Distillers Ltd, the producer of Officer’s Choice Whisky, has submitted revised preliminary documents to the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO) with the aim of raising INR 1,500 crore.

According to draft documents filed with the Securities and Exchange Board of India (SEBI) on Thursday, the initial public offering (IPO) includes a fresh issuance of equity shares valued at INR 1,000 crore and an Offer-For-Sale (OFS) of shares amounting to INR 500 crore by the promoters.

As part of the Offer-For-Sale (OFS), shares will be sold by Bina Kishore Chhabria, Resham Chhabria, Jeetendra Hemdev, and Neesha Kishore Chhabria.

Out of the total proceeds from the fresh issue, a sum of INR 720 crore will be directed towards debt payment, and the remaining portion will be utilized for general corporate purposes.

As of December 2023, the company’s debt stood at around INR 808 crore, as indicated in the draft papers.

Having a market share of 8.2 percent in Indian-Made Foreign Liquor (IMFL) during fiscal 2023, Allied Blenders and Distillers submitted draft papers to Sebi in June 2022 for an IPO worth INR 2,000 crore.

In December of the same year, the company received approval from Sebi to initiate its maiden public issue but opted not to proceed with the launch.

Allied Blenders and Distillers is involved in the production, promotion, and distribution of alcoholic beverages both in India and internationally.

The company’s range of products includes various brands of Indian-Made Foreign Liquor (IMFL), spanning whisky, brandy, rum, and vodka.

Some of the major brands of the company include Officer’s Choice Whisky, Sterling Reserve Whisky, Jolly Roger Rum and Class 21 Vodka.

ICICI Securities, ITI Capital and Nuvama Wealth Management are the book running managers and will advise the company’s on the maiden public issue.

Continue Exploring: Allied Blenders & Distillers appoints Alok Gupta as new Managing Director

AB InBev plans INR 400 Crore investment for brewery expansion in Karnataka

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January 18, 2024

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AB InBev, the world’s largest beer company headquartered in Belgium, has expressed its intention to invest INR 400 crore in expanding its brewery operations in Karnataka, according to a statement from the state industries department.

During a meeting at the World Economic Forum in Davos, Ab InBev India & South Asia President Kartikeya Sharma and Budweiser APAC Chief Legal and Corporate Affairs Officer Craig Katerberg shared this information with Industries Minister MB Patil.

The company’s top executives conveyed to the minister that they consider Karnataka to be the ideal location for the expansion of their operations.

Bengaluru hosts the Indian headquarters of the brewing company, which features over 500 global and local beer brands. The company manages a state-of-the-art brewery in Mysuru and a global capability center in Whitefield, employing 5,000 professionals dedicated to digital capabilities, big data, artificial intelligence, and global supply chain excellence.

In India, the contribution of premium brands has increased to two-thirds of its total sales, compared to a third over three years ago. The brewery has also expanded its focus beyond beer, introducing energy drinks, whiskey, spiced rum, vodka, and, more recently, gin to its portfolio.

Continue Exploring: AB InBev’s Corona Cero lands global sponsorship for Olympic Games until 2028

Haldiram’s sets sights on rival Prataap Snacks, explores controlling stake for market domination

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January 18, 2024

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Haldiram’s, a renowned snacks manufacturer, is currently engaged in discussions to secure a controlling interest in Prataap Snacks, a listed rival valued at $350 million. This strategic move aims to enhance Haldiram’s footprint in the potato chip market, as disclosed by two individuals familiar with the situation.

The discussions are in their initial phases, and as of now, no valuation has been deliberated upon. However, there is a possibility that the valuation might be set at a premium compared to Prataap’s current stock price. According to undisclosed sources, Haldiram’s is targeting a majority stake of at least 51%, but the final percentage remains undetermined. The sources have opted to remain anonymous due to the confidential nature of the discussions.

Prataap is renowned for its Yellow Diamond brand of chips, challenging competitors such as Pepsi’s Lay’s brand and other snack-makers in a market where local, unorganized food sellers continue to dominate the fried chips segment.

Peak XV Partners, previously identified as Sequoia Capital India, currently holds approximately 47% ownership in Prataap Snacks. Sources indicate that Peak XV Partners is actively seeking a complete divestment of their stake in Prataap.

Haldiram’s CEO Krishan Kumar Chutani, along with Prataap CEO Amit Kumat and representatives from Peak XV, all declined to provide comments on the matter.

Entering the stock market in 2017, Prataap recorded annual revenues of approximately $200 million last year. The company boasts a daily sale of over 12 million packets of its affordable salty snacks, priced as low as INR 5.

On the other hand, Haldiram’s, a privately-owned business founded in 1937, has grown into a significant player in the packaged snacks sector, amassing a revenue of over $1 billion. With operations spanning 150 restaurants nationwide, the family-run enterprise aimed for a $10 billion valuation in discussions with conglomerate Tata Group and other strategic investors last year. However, these talks failed to materialize, primarily due to concerns related to the company’s valuation.

Continue Exploring: Tata Consumer Products and Haldiram’s deny reports of potential stake acquisition

“A deal (with Prataap) will help Haldiram’s tap the potato chips segment. Consumers often prefer western flavored snacks over local ones,” said one of the sources.

Prataap operates 14 manufacturing plants spread across nine Indian states. While smaller, unorganized companies currently dominate India’s fried snacks sector, there has been a surge in demand for branded products in recent years. This trend is attributed to the increasing health consciousness among consumers and their higher disposable incomes, allowing them to invest in packaged goods.

On December 19, it was reported that Prataap’s founders and Peak XV were exploring the sale of a stake to investors and conglomerates. However, the buyers were not disclosed in the report.

Local snack manufacturers such as Prataap have faced challenges amid inflationary pressures and increasing competition in India, a market known for its price sensitivity. Despite these difficulties, the company’s stock price continues to linger close to its 2017 listing level.

In its November earnings report, Prataap projected that the snacks market in India was valued at $5.2 billion, with an annual growth rate of 14%.

Mahindra Holidays & Resorts inks MoU with Tamil Nadu for INR 800 Crore investment in Greenfield Resorts

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January 18, 2024

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Mahindra Holidays & Resorts India Ltd announced on Thursday its plan to invest INR 800 crore in Tamil Nadu for the development of three greenfield resorts over the next five to six years. In a statement, Mahindra Holidays & Resorts India Ltd (MHRIL) confirmed the signing of a Memorandum of Understanding (MoU) with the Tamil Nadu government for this substantial initiative.

The initiative is expected to create employment opportunities for more than 1,500 people, making a positive impact on the state’s overall economic landscape, as mentioned in the statement.

“With this significant investment, MHRIL will double its footprint in Tamil Nadu, with Club Mahindra already operating resorts in Ooty and Kodaikanal,” the company said.

This marks the second-largest investment by MHRIL, with the first being a INR 1,000 crore investment in Uttarakhand last year.

As per the statement, these investments are integral to the company’s expansion strategy aimed at doubling room inventory from 5,000 to 10,000 by 2030.

Further, MHRIL said as part of its commitment to sustainability and aim to achieve carbon neutrality by 2040, all the new resorts developed in Tamil Nadu will target to be “champions of net zero energy, water and waste, and in the process become role models for sustainable tourism in the state”.

Continue Exploring: Fortune Hotels plans expansion with 10 new properties and agreements in FY24, prioritizing tier-2 cities and leisure markets

FSSAI issues directives to airlines and flight caterers for strict compliance with food safety standards

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January 18, 2024

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The Food Safety and Standards Authority of India (FSSAI) has instructed all airlines and flight caterers to strictly adhere to food safety regulations and promptly take corrective actions to minimize incidents related to food safety.

During a recent meeting, FSSAI CEO G Kamala Vardhana Rao instructed airlines and flight caterers to adhere to labeling and display regulations. The aim is to provide passengers with information about the nature, origin, and manufacturing details of the food served during flights.

“The Food Safety and Standards Authority of India (FSSAI) convened a meeting with leading flight caterers and airlines on January 16, to evaluate and enhance the existing food safety protocols within the airline catering industry. The objective was to identify areas requiring improvement and to reinforce the commitment to providing passengers with safe and high-quality inflight meals,” an official statement released on Thursday stated.

During the meeting, FSSAI officials underscored the significance of promptly and effectively addressing consumer grievances. Airlines and caterers were urged to establish a robust mechanism for implementing corrective and preventive measures to reduce food safety-related incidents. The Authority highlighted the critical role that airlines and caterers play in ensuring the safety of passengers.

“Acknowledging a common concern regarding the lack of readily available information for passengers regarding inflight food, the CEO, FSSAI directed all flight caterers and airlines to strictly comply with sub-regulation 5(10) (f) and 8(4) of the Food Safety and Standards (Labelling and Display) Regulations, 2020. This directive aims to improve transparency by providing passengers with detailed information about the nature, origin and manufacturing-related details of the food served during flights,” the official statement added.

Stakeholders were additionally encouraged to prioritize menu labeling as a tool to educate passengers about the contents of the food served, enabling them to make informed choices.

“During the discussion, the need for specialized training programs for catering staff to ensure a comprehensive understanding of food safety and hygiene practices was given emphasis,” the FSSAI added.

Recently, a passenger raised concerns after finding worms in her sandwich during a flight, prompting FSSAI to issue a show-cause notice to the airline.

Continue Exploring: Indigo passenger’s unpleasant surprise: Live worm found crawling in veg sandwich

Starbucks India teams up with designer Manish Malhotra for exclusive Kashmir-inspired drinkware collection

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January 18, 2024

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Starbucks India has joined forces with designer Manish Malhotra to introduce an exclusive collection of lifestyle drinkware, as announced in a press release on Thursday. The range includes stoneware ceramic mugs, stainless steel tumblers, and reusable cups, with design inspiration drawn from exquisite Kashmiri motifs.

The reusable cups are available at a price of INR 850, stoneware ceramic mugs are priced at INR 2,100, and stainless steel tumblers can be purchased for INR 2,900. Each product comes with a personalized note from Manish Malhotra, as mentioned in the release.

Commenting on the collaboration, Manish Malhotra said, “I am delighted to join forces with Starbucks India to introduce the limited-edition collection. Kashmir holds a special place in my heart, serving as both a personal connection and a cornerstone of my brand’s identity. In crafting a signature collection for my collaboration with Starbucks, I aimed to seamlessly integrate the beauty and craftsmanship of Kashmir into everyday moments.”

The products will be available in different colour palettes including charcoal black, regal golds, pristine whites, and subtle carmines.

“At Tata Starbucks, we have always believed in the power of design, art, and community in sharing elevated experiences for coffee lovers across India. As we continue to lead growth in India, we are thrilled to partner with Manish Malhotra. We hope this collaboration elevates our consumers’ daily cup of coffee with Malhotra’s inimitable design language,” said Sushant Dash, chief executive officer, Tata Starbucks.

Continue Exploring: Starbucks CEO bullish on India’s coffee market, targets 1000 cafes by 2028

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