In a strategic move aimed at strengthening its position in the health and wellness sector, Tata Consumer Products is on the verge of acquiring Organic India, a prominent organic tea and Ayurvedic health products firm, according to media reports.
Industry insiders suggest that an official announcement regarding the proposed acquisition, which is anticipated to be a significant step for Tata Consumer Products, is imminent.
Organic India, backed by Fabindia, specialises in organic teas, infusions, herbal supplements, staple and packaged foods, personal care, and offers a wellness and detox program. The company collaborates with numerous small family farmers to source its products.
The move aligns with Fabindia’s objective to unlock value by divesting its non-core business, leveraging Tata Consumer’s extensive distribution network to scale up Organic India substantially.
Fabindia currently holds a 64 per cent stake in Organic India, while founder promoters own 17 per cent, Premji Invest holds 15 per cent, and the remaining shares are divided among employees and the ESPS trust.
The 2022-2023 annual report of Organic India reveals a decline in revenue by 15 per cent on a standalone basis and 22 per cent on a consolidated basis. The company reported a loss of Rs 44.35 crore on a standalone basis and Rs 88.06 crore on a consolidated basis during the same period.
This potential acquisition follows Tata Consumer Products’ earlier consideration of acquiring the Bisleri brand from the Ramesh Chauhan group, which was called off in March 2023. The company had also been linked to a transaction with the Haldiram Group and was seen as the front-runner to acquire Capital Foods, the parent company of the popular instant noodles and condiments brand Chings Secret.
Speaking at the 60th Annual General Meeting of Tata Consumer Products, N Chandrasekaran, had emphasised the expansion of both the beverages and food businesses. He stated, “Currently, we are expanding both the beverages and food businesses. So, there’s a lot of focus on these businesses; we got to scale them. And also, we are investing in R&D and innovation. We are looking at new categories and acquisition opportunities.”
Industry experts anticipate that the acquisition of Organic India will further enhance Tata Consumer Products’ portfolio in the health and wellness segment, aligning with evolving consumer preferences and trends.
