In a strategic move, Tata Consumer Products Ltd (TCPL) is gearing up for a Rs 3,500-crore rights issue, aimed at funding its substantial Rs 7,000-crore acquisitions of Capital Foods and Organic India, according to a recent report by The Economic Times.
TCPL's ambitious acquisitions, targeting Capital Foods and Organic India, were revealed last week, signaling a significant expansion of its product portfolio.
Capital Foods, home to renowned brands Ching's Secret and Smith & Jones, is set to become a part of TCPL through a 100% equity shares acquisition valued at Rs 5,100 crore. The remaining 25% shareholding is slated for acquisition within the next three years.
Simultaneously, TCPL is set to secure a 100% stake in Organic India, a Fabindia-backed venture, through an all-cash deal. The enterprise value is estimated at Rs 1,900 crore, complemented by an additional earnout tied to the company's FY2025-26 audited financials.
TCPL foresees immense potential in the categories operated by Capital Foods, estimating a market size of Rs 21,400 crore. Additionally, the acquisition of Organic India aligns with TCPL's strategic vision, creating a health and wellness platform by integrating primarily organic food and beverage products.
The acquisitions are anticipated to not only broaden TCPL's product range but also yield synergy benefits in distribution, logistics, exports, and overheads. The proposed rights issue aims to secure the financial backing necessary to realize these transformative ventures.
—Input from Agencies