Tata Consumer Products Ltd has unveiled two major acquisitions as part of its strategy to enhance its product range. The company has entered into definitive agreements to purchase 100% equity shares of Mumbai-based Capital Foods, the owner of popular brands ‘Ching’s Secret’ and ‘Smith & Jones’, for a total consideration of Rs 5,100 crore. Additionally, Tata Consumer has also finalized definitive agreements to acquire Organic India, backed by Fabindia, for Rs 1,900 crore. Organic India is involved in the production of packaged organic teas, herbal products, and health supplements.
The acquisition of Capital Foods will be executed in phases, with 75% of the equity shareholding acquired upfront and the remaining 25% to be obtained within the next three years, according to Tata Consumer. The move aligns with Tata Consumer’s strategic plan to expand its product portfolio and target addressable market in fast-growing/high-margin categories. Capital Foods boasts strong umbrella platform brands, including Ching’s Secret, a Desi Chinese market leader, and Smith & Jones, a rapidly growing brand specializing in Italian and other western cuisines.
The estimated turnover of Capital Foods for FY24 is approximately Rs 750 to 770 crore, while Organic India is expected to have a turnover of around Rs 360 to 370 crore for the same period.
Sunil D’Souza, MD & CEO of Tata Consumer Products, expressed excitement about the acquisitions, stating, “We believe this is a good strategic and financial fit,” and highlighted the significant market opportunities in the fast-growing non-Indian cuisines segment.
Regarding the Organic India acquisition, D’Souza mentioned that it aligns well with Tata Consumer’s overall strategic objectives and presents exciting market opportunities in the rapidly growing Health & Wellness segment.
The Total Addressable Market for the categories in which Organic India operates is Rs 7,000 crore in India and Rs 75,000 crore in international markets, where Tata Consumer has a strong presence.
Ajay Gupta, Founder of Capital Foods, remarked on the historic association with the Tata Group, stating, “To be associated with the iconic Tata Group is a dream come true for me.”
Investors in Capital Foods, including General Atlantic, expressed support for the move. Shantanu Rastogi, Managing Director and Head-India for General Atlantic, stated, “We wish Ajay and Tata Consumer Products the best in the next phase of development of Capital Foods.”
William Bissell, Managing Director of Fabindia, welcomed Tata’s guidance for Organic India’s next chapter, emphasizing Tata as India’s most venerated brand. On Friday, Tata Consumer’s stock was trading 3.5% higher at Rs 1,158.7.
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