MUMBAI:
Tata Consumer Products
will acquire
Capital Foods
, best known as the maker of
Ching's Secret desi-Chinese sauces
and Smith & Jones ginger garlic paste, as well as Fabindia-backed
Organic India
, which sells organic teas and health products.
The company will buy Capital Foods for an enterprise value of Rs 5,100 crore and Organic India for Rs 1,900 crore.
The deals will help Tata Consumer to strengthen its food & beverage offerings. The company will initially acquire 75% of Capital Foods and will buy the remaining 25% in three years time. However, in the case of Organic India, it will buy 100% of the target unit.
Tata Consumer said while it will have full operating control and majority in board representation at Capital Foods, founder Ajay Gupta will continue as a consultant. Capital Foods had a turnover of Rs 770 crore in fiscal 2024, while Organic India had a turnover of Rs 370 crore during the same financial year.
Tata Consumer said that it plans to raise funds via a debt issue in the form of debentures or through an equity offering in the form of rights issue. Its board will meet on January 19 to consider the fund-raising proposal. Through Capital Foods, Tata Consumer forays into adjacent high growth food categories, whereas through Organic India it will create a health and wellness platform. The overall size of the categories in which Capital Foods operates in, is estimated at Rs 21,400 crore.
Sunil D'Souza, MD & CEO, Tata Consumer, said, " 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." Structural growth drivers for the category include continued growth in income levels.
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