Tata Consumer Products greenlights fundraising of up to Rs 6,500 cr for Capital Foods, Organic India acquisitions.

Tata Consumer Products has authorized fundraising of up to Rs 6,500 crore, as per an official statement on Friday. The company aims to achieve this through the issuance of Commercial Papers, with an upper limit of Rs 3,500 crore, and a rights issue of equity shares with a face value of Re 1 each, not exceeding Rs 3,000 crore. The detailed terms of the rights issue, including the issue price, rights entitlement ratio, record date, timing, and payment terms, will be determined by the Board or the Capital Raising Committee.

The funds amounting to Rs 3,500 crore will be utilized as bridge funding for the proposed acquisition of stakes in Capital Foods Private Limited and Organic India Private Limited. Tata Consumer Products had previously announced its definitive agreements on January 12 to acquire 100% equity shares of Capital Foods, which owns popular brands like 'Ching’s Secret' and 'Smith & Jones'. The acquisition will occur in phases, with 75% of the equity shareholding acquired upfront and the remaining 25% within the next three years. The move aims to enhance Tata Consumer Products' product portfolio and strengthen its pantry platform, with the estimated market size of the categories in which Capital Foods operates being Rs 21,400 crore.

Additionally, Tata Consumer Products also finalized agreements on the same date to acquire up to 100% of the issued equity share capital of Organic India. This strategic move aligns with Tata Consumer's goal to expand its product portfolio and target addressable markets in fast-growing/high-margin categories, creating a Health & Wellness platform. The Total Addressable Market for the categories in which Organic India operates is estimated at Rs 7,000 crore in India and Rs 75,000 crore in international markets where Tata Consumer holds a strong presence.

Sunil D’Souza, MD & CEO of Tata Consumer Products, expressed confidence in the strategic and financial fit of these acquisitions, anticipating significant market opportunities and operational strength across channels. The transactions are expected to accelerate business momentum, contribute to top-line growth, and enhance cost synergies, ultimately being margin accretive to the company's business.