In a recent update on Monday, Tata Consumer Products Ltd (TCPL) which is also a part of TATA group, seems to be ready to announce a Rs 3,500-crore rights issue as it prepares to fund Rs 7,000-crore acquisitions of Capital Foods and Organic India.
Mega AcquisitionIn Store
Interestingly, this report comes days after TCPL announced its mega acquisitions in strengthening its portfolio.
This move by TCPL indicates its plans to diversify into high-margin, value-added food segments beyond commodities through these acquisitions that were announced last week.
The overall size of the categories in which Capital Foods operates is estimated at Rs 21,400 crore, said TCPL.
According to TCPL, “Organic Foods, which is primarily organic food and beverage products, will enable the creation of a health and wellness platform.”
Earlier, TCPL announced the acquisition of 100 percent equity shares of Capital Foods, owner of the brands Ching’s Secret and Smith & Jones, for Rs 5,100 crore on Friday.
The company said, ”It has agreed to acquire 75 percent shareholding of the target company. Balance 25 percent shareholding of the target company to be acquired within 3 years,” in a statement.
Expanding Product Portfolio
Apart from this, TCPL will also be acquiring a 100 percent stake in Fabindia-backed Organic India.
This would be an all-cash deal, with an enterprise value of Rs 1,900 crore.
Besides this, they have also agreed an additional earnout for the shareholders linked to FY2025-26 audited financials of the company.
It appears that the acquisition of Capital Food will help in enabling Tata Consumer Products to expand its product portfolio, hence strengthening its pantry platform.
The company further added, ”There are significant synergy benefits with the existing businesses of Tata Consumer Products in areas spanning distribution, logistics, exports and overheads. The overall size of the categories in which Capital Foods operates is estimated at Rs 21,400 crore.”
