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Tata Consumer Products Ltd's MD & CEO, Sunil D'Souza, addressed concerns in an analyst call, asserting that there are no plans to rebrand Ching's Secret, Smith & Jones, and Organic India, according to a report by The Financial Express (FE). D'Souza responded to investor queries regarding the acquisitions of Capital Foods and Organic India, emphasising continuity in the acquired brands.
Tata Consumer is set to acquire a controlling stake in Organic India from Fabindia at a valuation of Rs 1,800 crore and a 75 per cent stake in Capital Foods from Invus Group and General Atlantic at Rs 5,100 crore. These acquisitions are seen as strategic moves to enhance Tata Consumer's portfolio and compete more effectively in the Indian market.
While Organic India specialises in teas, infusions, herbal supplements, and personal care items, Capital Foods is known for instant noodles, soups, and condiments under the brands Ching's Secret and Smith & Jones. Tata Consumer aims to leverage the global reach of both brands, aligning with its strategy to become a large FMCG company.
D'Souza clarified to FE that the Tata name would be evaluated for addition to the acquired brands through a careful process, citing the successful integration of the Tata name with the Soulfull brand, acquired in 2021. Tata Consumer has been working toward transitioning into a large, fast-moving consumer goods (FMCG) company, focusing on organic and inorganic growth initiatives.
Regarding funding for the recent acquisitions, Tata Consumer is exploring multiple options. The company reportedly has Rs 3,000 crore in cash, and the remaining balance of Rs 4,000 crore may be raised through a mix of short-term debt and a proposed rights issue of Rs 3,500 crore. The rights issue's final approval is expected during a Tata board meeting on January 19.
The company's financial year 2022-23 consolidated turnover was Rs 13,783 crore, and D'Souza outlined plans for Tata Consumer to play a significant role in the food and beverages sector. He mentioned looking at value-accretive inorganic opportunities that provide access to fast-growing categories.
D'Souza indicated that the Capital Foods transaction would close in two weeks, while the Organic India acquisition would take around 45-60 days to close. Integration plans involve strategic placement of both Capital Foods and Organic India within Tata Consumer's existing platforms, aligning with their respective product portfolios. The integration includes focusing on breakfast and mini-meals for Capital Foods, pantry business for Smith & Jones sauces and pastes, and premium teas for Organic India's teas and infusions.
