Tata Consumer Products on Friday announced that its board of directors have considered and approved the fundraising of up to Rs 6,500 crore. In a regulatory filing, the company said that it has approved raising of funds through the issuance and allotment of Commercial Papers, for an amount not exceeding Rs 3,500 crore, and also raising of funds by way of issue of equity shares of the company of face value Re 1 each through rights issue for an amount not exceeding Rs 3,000 crore.
“For the purposes of giving effect to the rights issue, the detailed terms to the rights issue including but not limited to issue price, rights entitlement ratio, record date, timing and terms of payment will be determined in due course by the Board, or the ‘Capital Raising Committee’ constituted by the Board, in accordance with applicable laws, subject to receipt of necessary approvals, as may be required,” it said in the exchange filing.
Tata Consumer Products said that the funds amounting to Rs 3,500 crore is to be utilized for bridge funding to facilitate the payment of consideration for proposed acquisition of stakes in Capital Foods Private Limited and Organic India Private Limited.
Earlier on January 12, Tata Consumer Products had announced that it has signed definitive agreements to acquire 100 per cent equity shares of Capital Foods, owner of the brands ‘Ching’s Secret’ and ‘Smith & Jones’, in a phased manner. 75% of the shares will vest upfront and the remaining 25% will vest over the next three years. This acquisition is aimed at enabling Tata Consumer Products to expand its product portfolio and further strengthen its pantry platform. The overall size of the categories in which Capital Foods operates is estimated to be Rs 21,400 crore.
Sunil D’Souza, Managing Director and CEO, Tata Consumer Products, said: “We believe this is a strategic and financial fit. This will open up significant market opportunities in the rapidly growing non-Indian cuisine segment, leveraging the sales and distribution platform we have built. The strong brand awareness of Ching’s Secret and Smith & Jones, combined with our operational strength across all channels, makes us extremely confident in our ability to drive revenue growth and realization maximize cost synergies. This transaction will accelerate our business momentum and increase our margins.
On the same day, Tata Consumer Products also announced that it has signed definitive agreements to acquire up to 100% of the issued share capital of Organic India. The move is in line with Tata Consumer’s strategic intent to expand its product portfolio and focus. addressable markets in high-margin, fast-growing categories. This acquisition will create a health and wellness platform for Tata Consumer Products. The total addressable market for the categories where Organic India has a presence is Rs 7,000 crore in India and Rs 75,000 crore in international markets where Tata Consumer has a strong presence.
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