Tata Consumer Plans Rs 6,500 Crore Fund Raise for Acquisitions via Commercial Papers and Rights Issue

19 Jan 2024 , 02:54 PM

Tata Consumer Products Ltd. approves fund raising of Rs 6,500 crore through commercial papers and a rights issue. The company aims to raise Rs 3,500 crore via commercial papers, earmarked for bridge funding to facilitate the payment for the acquisition of stakes in Capital Foods Pvt. Ltd. and Organic India Pvt. Ltd.
 

A rights issue is planned to raise up to Rs 3,000 crore, with details such as issue price, entitlement ratio, record date, and timing to be determined later. Recent acquisitions include a 100% stake in Capital Foods for Rs 5,100 crore and Organic India for Rs 1,900 crore, marking an entry into the health and wellness category.
 

Tata Consumer MD & CEO Sunil D’Souza emphasizes that these acquisitions will enhance shareholder value. Immediate margin synergy of 400 basis points with Capital Foods is highlighted, with potential for steady margins exceeding 25%.
Plans to raise funds through CPS or a rights issue for these acquisitions, ensuring ample capital for future inorganic growth.
While not currently engaged in talks for additional acquisitions, the company remains open to future opportunities.
 

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