Following the announcement of two potential acquisitions valued at INR 7,100 crore, Tata Consumer Products Ltd. is considering raising funds through a combination of debt issuance and equity from existing investors.
In an exchange filing on Friday, the company stated that a board meeting is set for January 19 to discuss various matters, including the potential fundraising through the issuance of commercial papers or debentures, a rights issue, or any other suitable mode as determined by the board.
Tata Consumer Products’ Dual Acquisition: Capital Foods and Organic India
The decision to raise capital comes as the Tata Group company has agreed to acquire Capital Foods Pvt., the owner of Ching’s Secret and Smith & Jones, and Fabindia-Backed Organic India, to expand its portfolio of high-margin businesses.
The Tata Group agreed to acquire the Ajay Gupta-founded Capital Foods through an all-cash deal, as revealed in its exchange filing on Friday. The phased acquisition is set at an enterprise value of INR 5,100 crore.
Tata Consumer also intends to acquire Organic India with an enterprise value of INR 1,900 crore, aiming to establish a health and wellness platform. The company has entered into a share-purchase agreement with Fabindia for an all-cash deal, according to a separate exchange filing.
Actress and Entrepreneur Sunny Leone has unveiled ‘Chica Loca by Sunny Leone,’ a fusion of global cuisine and a cocktail bar.
The inauguration of the flagship venue is set for January 22nd in partnership with Singing Bowls Hospitality, led by Sahil Baweja, situated at Gulshan One 29 in Noida.
“Chica Loca is more than a place; it’s an extension of my personality. It’s where people can immerse themselves in glamour yet feel completely at ease. I can’t wait for guests to enjoy their favourite artists while sipping their favorite cocktails and get a taste of my loca world,” said Sunny Leone.
Chica Loca’s Unique Culinary Blend:
The menu at Chica Loca mirrors Sunny Leone’s global travels and diverse experiences. Curated by Chef Vaibhav Bhargava, it introduces undiscovered flavors and innovative culinary techniques from various corners of the world.
The culinary offerings showcase a contemporary interpretation of multi-cuisine, incorporating influences from Indian, Asian, Mexican, and Italian culinary traditions.
In alignment with the culinary offerings, “Potions by Sunny Leone” introduces a diverse array of cocktails, each with its unique narrative and inspiration drawn from her Bollywood ventures, travel escapades, and personal moments.
Sahil Baweja, Director of Singing Bowls Hospitality, said, “We aim to create an environment that mirrors Sunny’s infectious energy and joyous persona. Chica Loca by Sunny Leone is our endeavor to create a blend of fantastic food, entertainment, and an unforgettable experience.”
With the launch of Chica Loca by Sunny Leone, the actress-entrepreneur marks the beginning of a new chapter in the realms of gastronomy and entertainment.
Cash-strapped delivery startup Dunzo communicated to its former employees on Friday evening that it is actively developing a comprehensive, long-term business strategy to address outstanding liabilities and fulfill pending salary commitments.
In October last year, the firm backed by Reliance Retail had informed its former employees that salaries for June and July, along with final settlements, would be disbursed by February 2024. The payment will encompass a 12% annual interest calculated on the employee’s tenure of service.
Dunzo will now outline a payment timeline by January 31 as the company formulates a solution over the next couple of weeks, as mentioned in the email.
“As you would recall, Dunzo has always been a transparent organisation and has operated with the absolute best intent for its team members. It is unfortunate that we haven’t been able to meet our financial commitments due to unforeseen business and external funding situations in the recent past. We are extremely sorry for this,” the email noted.
Dunzo’s Partner Store Setback:
In December, several of Dunzo’s partner stores, including Easy Bazar and MK Retail, temporarily went offline as the company delayed payments for grocery orders. They returned online in the same week after the dues were cleared.
The on-demand delivery platform has postponed salary payments on multiple occasions, citing preparations to secure additional funding to meet its payment obligations.
Earlier in August, SnackFax had reported that Dunzo was scaling down its quick commerce operations under Dunzo Daily massively to cut down cash-burning propositions and focus on more lucrative verticals. A Dunzo spokesperson later confirmed that the company is in the process of moving to a partner store format.
After shutting down the majority of its dark stores in major cities, including Bengaluru, the company collaborated with several offline retail stores like MK Retail, Easy Bazar, Pristine Supermarket, and Deepa Retail to fulfill quick commerce orders.
In October, Dalvir Suri, a Co-founder of Dunzo, resigned from his position. Suri played a pivotal role in introducing new business lines, including Dunzo Merchant Services (DMS).
Hein Schumacher, the CEO of Unilever, said that Hindustan Unilever, the company’s Indian unit, has undoubtedly become one of Unilever’s strongest and largest operations.
“The growth prospects of India as a country offer enormous potential, with the nation’s leapfrog into digital and favourable demographics seen in a younger population,” he posted on LinkedIn after a three-days visit to India this week.
Hindustan Unilever Limited (HUL) contributes over 11% to Unilever’s worldwide sales, making it the second-largest market for the company in terms of revenue, following the United States. Renowned for products like Rin detergent, Dove shampoo, and Lux soap, HUL holds a dominant position in the Indian market, leading in the majority of segments it operates, with nearly 80% of its portfolio either gaining or maintaining market share. During his market visits, Schumacher engaged with various stakeholders, including customers and top executives from Nykaa, Reliance Retail, the pharmacy chain Wellness Forever, and local kirana stores.
CEO Emphasizes Digital Transformation at Hindustan Unilever
“Leveraging the digital wave, for instance, 1.3 million neighbourhood retail stores across India have been using Shikhar, our in-house app that has transformed how we engage and conduct business with our partners. Its success demonstrates the tremendous opportunity for the digitalisation of the value chain,” added Schumacher on his maiden visit to the country after becoming Unilever’s CEO last July.
HUL’s Shikhar, an internal ordering application, enables small neighborhood stores to place direct orders, yet these orders are fulfilled through distributors. Widely adopted by several developing nations, this Indian innovation accounts for almost 40% of the total sales for India’s largest consumer goods company.
During his tour of the retail outlets, the executive emphasized his attention on the strategic arrangement of a diverse array of products in even the most limited spaces. He specifically noted the pivotal role played by technology in shaping this organizational dynamic.
“Our in-house app has transformed how we engage and conduct business with our partners at their convenience. Its success demonstrates the tremendous opportunity for the digitalisation of the value chain,” he told retailers.
His visit coincides with the All India Consumer Products Distributors Federation (AICPDF) raising concerns about HUL’s new margin structure. The AICPDF has expressed its determination to fight for the restoration of margins and has even issued a warning about a possible boycott of HUL’s products. However, HUL has maintained that their terms of trade with distributors are bilateral, and the supply of their products remains uninterrupted.
In the September quarter, HUL experienced a 3% increase in volumes, reflecting that a significant portion, three-fourths to be precise, of its growth originated from increased demand rather than price hikes. HUL’s performance is often viewed as a gauge for the overall consumer sentiment in India. During a recent Barclays Fireside conference, Schumacher cautioned against complacency regarding HUL’s market share, hinting that its historically strong position in India might face challenges with the growing competition.
Tata Consumer Products Ltd (TCPL) announced on Friday that it has entered into definitive agreements for the complete acquisition of Capital Foods, the proprietor of Ching’s Secret and Smith & Jones, and Organic India, a Fabindia-supported producer of organic teas and health products. While TCPL did not disclose the exact cost of the Capital Foods acquisition, individuals familiar with the matter indicated that the valuation of the instant noodles and condiments manufacturer stood at INR 5,100 crore. TCPL stated that the acquisition of Organic India would amount to INR 1,900 crore.
TCPL is set to acquire 75% of Capital Foods initially, with the remaining 25% to be acquired over the next three years. Both Invus Group and the US private equity group General Atlantic will divest their current stakes of 40% and 35%, respectively. Invus, functioning as a European family office and investment arm, will be part of the divestment.
“This move is consistent with Tata Consumer’s strategic intent to expand its product portfolio and its target addressable market in fast growing/high margin categories,” TCPL said in a stock exchange filing.
Nestle India’s Position Amid Tata Consumer Products’ Move
“The development is mildly negative for Nestle India as Nestle was also likely one the bidders for Capital Foods and competition in noodles and cooking aids will increase once TCPL acquires Capital Foods as it can scale it up further,” Nuvama Equities said in a note.
TCPL said that Capital Foods has strong umbrella platform brands with a distinctive product portfolio tailored for in-home consumption in rapidly expanding categories. Ching’s Secret, a market leader in desi Chinese products, encompasses a range of items including chutneys, blended masalas, sauces, and soups. Additionally, Smith & Jones focuses on facilitating in-home preparation of Italian and other Western cuisines.
The acquisition will empower TCPL to broaden its product portfolio and enhance its pantry platform. Substantial synergy benefits will be realized through the integration with TCPL’s existing businesses, encompassing distribution, logistics, exports, and overheads.
“We believe this is a good strategic and financial fit,” said Sunil D’Souza, TCPL MD and CEO. “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.”
Shantanu Rastogi, managing director and head, India, at General Atlantic, said, “We have had a great partnership with (Capital Foods founder) Ajay Gupta in scaling Ching’s and Smith & Jones. We wish Ajay and Tata Consumer Products the best in the next phase of development of Capital Foods.”
TCPL will complete the full acquisition of Organic India through an all-cash transaction amounting to INR 1,900 crore.
“The board of directors approved the acquisition of up to 100% of the equity share capital of Organic India Pvt Ltd,” TCPL said in an exchange filing. “This move is consistent with Tata Consumer’s strategic intent to expand its product portfolio and its target addressable market in fast-growing/high-margin categories. This acquisition will create a health and wellness platform.”
The total market size for the categories in which Capital Foods operates is estimated to be INR 21,400 crore.
JoySpoon, a D2C brand specializing in mouth fresheners, also known as Mukhwas, has successfully raised INR 1.25 crore in a funding round led by 100X VC.
Gujarat-based JoySpoon offers high-quality and tastier alternatives to traditional mouth fresheners. The team has meticulously designed their product lineup to include age-old natural ingredients in their recipes without the addition of excessive sugar or artificial flavors. Their recipes ingeniously incorporate ancient wisdom to address common gastrointestinal concerns such as acidity and digestion.
Acknowledging the absence of health-conscious and wholesome alternatives to traditional mukhwas that contain sugars, preservatives, and artificial flavors, 100X VC chose to back the company due to its positive initial traction and capable founding team.
As mentioned by the team at 100x VC in their investment note, “JoySpoon represents an unparalleled prospect in the disorganized landscape of the Indian mouth fresheners market. With robust competitive advantages and capable founders, JoySpoon emerges as an enticing investment opportunity. Positioned strategically, the company is poised to leverage the growing momentum of the Indian mouth freshener market and emerge as a global industry leader.”
JoySpoon was established by Yash Mehta and Vaishali Mehta in 2023. Yash Mehta, a Chartered Accountant by profession, harbors a profound passion for high-quality foods and possesses a keen understanding of market trends, particularly in the D2C domain. Furthermore, Vaishali Mehta, with a background in retail, contributes expertise in product curation, product development, and online marketing. As a dynamic couple-preneur duo, they aspire to revolutionize and elevate mukhwas to international acclaim as a distinctive Indian product.
Costa Coffee has partnered with plant-based culinary experts BOSH! to launch a fresh assortment of plant-based savory and sweet offerings throughout its United Kingdom outlets.
The companies aim to enhance the accessibility and convenience of plant-based dining for on-the-go customers.
The latest range, available at over 2,600 Costa Coffee establishments across the UK, aims to transform the accessibility of plant-based food choices.
BOSH! officials Henry Firth and Ian Theasby stated, “Our mission is to get more plants onto more plates, and our collaboration with Costa Coffee has paved the way for easier access to delicious plant-based products across the United Kingdom.
“We’re incredibly proud to be working with the nation’s favourite coffee shop, making it more convenient than ever for customers to enjoy flavourful plant-based options without compromising on taste or accessibility.”
Varied Plant-Based Choices at Costa Coffee
Costa Coffee and BOSH!’s collaboration is committed to providing a varied range of meat-free, plant-based foods for customers to savor alongside their preferred Costa coffee, complemented by a plant-based milk alternative.
For breakfast, patrons have the choice of the Plant-Based Smashin’ Sausage Bap or the Plant-Based Saucy Chicken Fajita Wrap.
Dessert options encompass the fresh Caramelised Biscuit Rocky Road and the Double Chocolate Cookie.
The partnership introduces the concept of “delish-etarian,” a term designed to transcend conventional dietary labels.
Costa Coffee food innovation head Cathy Goodwin stated, “We’re proud to be making plant-based products more accessible at Costa Coffee with an exciting collaboration with BOSH!
“Ultimately, everyone wants to eat delicious food, and [by] teaming up with the remarkable talents at BOSH!, together we have created a range of delicious plant-based products tailored for delish-etarians everywhere. “
In December 2023, Costa Coffee unveiled its refurbished establishment at Cornhill in Dorchester, UK.
The upgraded establishment prioritizes convenience for customers on the go, offering touchscreen ordering and a designated collection point.
McDonald’s China has partnered with Cainiao, the logistics branch of the Alibaba Group, to improve supply chain efficiency, as reported by the South China Morning Post.
The collaboration will incorporate technologies like radio frequency identification (RFID) to streamline McDonald’s processes from manufacturing to the point of sale.
McDonald’s China will implement Cainiao’s RFID technology in its supply chain by incorporating built-in tags on food packaging. This will facilitate the tracking of products from factories to restaurants.
The initiative is anticipated to enhance inventory management and decrease the time needed for stocktaking.
RFID is a third-generation identification technology, succeeding bar codes and QR codes. It functions by transmitting data via radio frequency signals from a microchip within the tag.
The two companies tested the RFID system, and the findings indicated that participating restaurants could perform a daily stocktake in just 15 minutes, as opposed to an hour.
The precision of inventory data also saw a 30% improvement.
In order to streamline the supply chain for fast-food establishments, McDonald’s and Cainiao will explore digitalization and automation technologies more extensively.
McDonald’s China operates 5,500 establishments and employs 200,000 individuals to cater to over a billion customers each year.
This partnership comes at a time when the logistics company is planning to raise $1 billion through an IPO (initial public offering) in Hong Kong, after submitting its filing to the city’s stock exchange in September 2023.
In November 2023, McDonald’s reached an agreement to purchase the minority stake held by investment firm Carlyle in the partnership responsible for operating McDonald’s business in mainland China, Hong Kong, and Macau.
McDonald’s, through this deal, will increase its ownership stake from 20% to 48%. CITIC Capital, a Chinese alternative investor, will retain the remaining 52% stake.
The deal is set to conclude in the first quarter of 2024.
Following HSBC, Goldman Sachs and Jefferies have raised their price targets (PTs) for Zomato, a leading foodtech company, due to robust growth in its food delivery and quick commerce segments.
Goldman Sachs raised its price target on Zomato from INR 130 to INR 160, indicating a 14.6% upside from the stock’s recent closing price. The global brokerage highlighted Zomato as the fastest-growing company in its global food delivery and India internet coverage.
According to analysts at Goldman Sachs, the food delivery market has solidified around two main players, with Zomato commanding approximately 55% of the market share in the first half of 2023. Additionally, they highlighted that Blinkit has ascended to become one of the top three online grocery platforms in India based on gross order value (GOV).
The brokerage anticipates a 45% Compound Annual Growth Rate (CAGR) in Blinkit’s Gross Order Value (GOV) between the fiscal years 2024 and 2027, surpassing the industry rate of 34%.
“Given the potential TAM for online grocery is 8-10X larger than that for food delivery per our estimates, Zomato achieving positive unit economics in this segment recently could result in revenue growth remaining elevated for a multi-year period,” said the analysts at Goldman Sachs.
It’s worth mentioning that Zomato’s quick commerce subsidiary, Blinkit, achieved a positive contribution for the first time in the second quarter of fiscal year 2024. The company envisions this business attaining adjusted EBITDA breakeven by the first quarter of fiscal year 2025.
Addressing the competitive landscape, analysts at Goldman Sachs additionally noted that in the first half of 2023, Zomato’s trading losses were only a quarter of those incurred by its main competitor, Swiggy, led by Deepinder Goyal.
In terms of competition, Goldman Sachs analysts also mentioned that trading losses for Zomato’s primary rival, Swiggy, were four times higher than those of the Deepinder Goyal-led startup in the first half of 2023.
“…with Swiggy aiming to achieve group level profitability by CY24, we expect competitive intensity across both food delivery and quick commerce to remain benign for Zomato,” the analysts added.
Moreover, in a research note titled “The Rise of ‘Affluent India’,” Goldman Sachs identified two modern tech startups, MakeMyTrip and Zomato, as its top recommendations.
The research report indicated that approximately 4% of India’s working-age population boasts a per capita income of $10,000 (a little over INR 8 lakh), equating to approximately 60 million consumers. According to its analysis, this consumer group has demonstrated a Compound Annual Growth Rate (CAGR) of over 12% during the period from 2019 to 2023.
“If the current trajectory continues, we expect ‘Affluent India’ will grow to about 100 Mn consumers by 2027,” it said.
It identifies sectors like leisure, jewellery, out-of-home food, healthcare, and premium brands across all categories as the primary beneficiaries of the emerging ‘Affluent India.’ While various stocks are linked to these segments, Goldman Sachs suggests that Zomato could be among the major beneficiaries of this trend.
It also anticipates Zomato’s revenue to achieve a 30% Compound Annual Growth Rate (CAGR) during the fiscal years 2024 to 2027, marking the highest growth rate within its coverage of the India Internet sector.
Many brokerages are now redirecting their attention to the business expansion of Blinkit, anticipating that its growth will propel Zomato forward.
Jefferies increased its price target for Zomato from INR 165 to INR 190, indicating a 36.1% upside from the stock’s most recent closing price.
The brokerage stated that Blinkit presents a substantial opportunity in the dynamic quick commerce sector, with the potential for additional positive developments, as investors are just beginning to perceive it more favorably.
Being in the early stages of growth, Blinkit is projected to experience accelerated expansion at a 38% Compound Annual Growth Rate (CAGR) from FY24 to FY28. Jefferies also foresees significant margin improvements, with the contribution margin expected to reach 6% by FY28 and the EBITDA margin to achieve 4%.
Meanwhile, the brokerage observed that Zomato consistently achieves robust growth while enhancing profitability, validating its premium valuations.
Zomato’s shares experienced a surge of over 100% in 2023, leading to a doubling of its market capitalization, surpassing the $12 billion mark. This valuation is the highest among other listed new-age tech startups.
Despite maintaining a positive long-term outlook, HSBC Global Research anticipates Zomato to deliver subdued results in Q3 FY24, especially in its food delivery segment following a robust second quarter.
HSBC anticipates that Zomato’s financial performance for the December quarter is likely to fall below expectations, potentially exhibiting a slight decrease compared to the September quarter.
However, the brokerage expects Blinkit’s growth to have remained strong in Q3 FY24.
“We believe food value is well captured in the current stock price and further upside will largely be driven by the QC (quick commerce) business. We now also expect profitability improvement to be gradual in the near term and hence market focus will be on QC growth,” HSBC research analysts said. “After an extremely strong 2023, we expect relatively muted business and stock performance in 2024.”
All the above-mentioned brokerages have a ‘buy’ rating on Zomato.
Following a peak at a new 52-week high of INR 141.55 in intraday trading on Friday (January 12), Zomato’s shares closed today’s session approximately 1% higher at INR 139.6 on the BSE.
Raymond, the renowned Indian menswear fashion retailer, has unveiled its largest The Raymond Shop in the country. The expansive store, spanning 22,500 square feet of retail space, is now open on MG Road in Kochi, Ernakulam district, as announced in a press release on Thursday.
The Raymond Shop presents a premium retail experience, offering a diverse array of wardrobe options for men. Featured among its esteemed selection are brands from the Raymond’s stable, such as Raymond Apparel, Raymond Made to Measure, Raymond Ready-to-Wear, Ethnix By Raymond, Park Avenue, ColorPlus, and Parx.
The ground level showcases a variety of casual wear options, featuring shirts, t-shirts, denims, corduroys, jackets, sweatshirts, and athleisure wear. These selections are curated from renowned brands like Park Avenue, ColorPlus, Parx, and Raymond Ready to Wear.
The floor also accommodates The Linen Story, a dedicated area for linen clothing and a personalized service counter from Raymond. Clients can select fabric samples, provide precise measurements, and create factory-made garments with customization options. The segment is complemented by accessories, innerwear, and a range of woolens.
The first floor features formal wear and a custom tailoring zone, while the second floor houses the Ethnix By Raymond section, offering traditional, ceremonial, and Indo-Western attire. Spanning 5,000 square feet, this space ranks among the country’s most expansive Ethnix standalone store areas.
The top-most level comprises an exclusive Raymond Home section, featuring a variety of bed sheets, bed linens, towels, pillows, and bathwear. Additionally, there’s a new café named Café Palette that caters to the culinary needs of shoppers, offering food and beverages.
The store is under the ownership of the Aswani Lachmandas Group, which manages three additional ‘The Raymond Shops’ in Kerala situated at Marine Drive, Lulu Mall, and Thrippunithura.
Established in 1925, the Indian fabric and fashion retailer Raymond Group owns a range of apparel brands, including Raymond Apparel, Raymond Made to Measure, Ethnix by Raymond, Park Avenue, Park Avenue Woman, ColorPlus, Kamasutra, Parx, and the home store Raymond Home.
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