Tata Consumer Products to Raise Rs 3,500 Crore in Debt for Acquisitions

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Tata Consumer Products Ltd (TCPL), a subsidiary of the Tata Group, announced on Friday that it will raise Rs 3,500 crore in debt to finance its recent acquisitions of Capital Foods and Organic India.

Bridge Financing and Rights Issue

The company's board of directors approved the issuance and allotment of Commercial Papers for an amount not exceeding Rs 3,500 crore. This bridge financing will be used to facilitate the payment for the two proposed acquisitions.

TCPL plans to repay the bridge financing through a combination of a rights issue equity of up to Rs 3,000 crore and internal accruals.

Acquisitions of Capital Foods and Organic India

Last week, TCPL announced the acquisition of Capital Foods, which owns popular brands like Chings Secret and Smith & Jones, at an enterprise valuation of Rs 5,100 crore. The company also acquired Organic India, a Fab India-backed entity operating in the health and wellness category, at an enterprise value of Rs 1,900 crore.

Details of the Acquisitions

TCPL will acquire 100% equity shares of Capital Foods, gaining ownership of well-known brands such as Chings Secret and Smith & Jones. The enterprise valuation for this acquisition is set at Rs 5,100 crore.

Additionally, TCPL will acquire Organic India, a company focused on the health and wellness sector. The enterprise value for this acquisition is determined to be Rs 1,900 crore.

Tata Consumer Products' strategic move to raise funds through debt and a rights issue demonstrates its commitment to expanding its portfolio and strengthening its position in the consumer goods industry. The acquisitions of Capital Foods and Organic India align with TCPL's vision to offer a diverse range of products and cater to evolving consumer preferences.