Tata and ITC Rival for Majority Stake in Fabindia's Organic India
Tata Consumer Products is anticipated to outpace ITC in the competition to secure a controlling interest in Organic India, a company backed by Fabindia and known for its focus on organic and ayurvedic health products. The bidding process reveals Tata Consumers and ITC as the primary contenders for this acquisition.
The discussion between Tata Consumer and Organic India is still progressing, while the Moneycontrol report states that the Tata company is leading in the bidding war against ITC. "Tata Consumer wants to focus on the health and organic products segment and Organic India fits in with their investment thesis. The talks between both the parties are at an advanced stage", the report said.
However, it is not yet confirmed if these discussions will lead to a transaction or not. The potential purchase of majority stock in Organic India pushes Tata Consumer Products' agenda to make an impact in the organic product industry. Tata Consumers can majorly upscale the business of Organic India through its strength in distribution and supply chain, while the business is non-core for Fabindia, which is aiming to unlock its full potential.
At present, Fabindia possesses a majority stake of 64 percent in Organic India, making it the exclusive major investor in the company. The founder promoters hold 17 percent, Premji Invest holds 15 percent, and the remaining ownership is distributed among employees and the ESPS trust. While Tata Consumer was previously engaged in discussions for an acquisition deal with the bottled water brand Bisleri, these negotiations fell through. However, Tata's expansion efforts extend beyond Organic India and Bisleri in the retail sector.
Previously, Tata Consumer Products engaged in discussions with the Haldiram Group, exploring the possibility of a prospective deal. In addition to this, Tata is currently in negotiations with Capital Foods, a private equity firm General Atlantic-backed entity and the parent company of Chings Secret, a brand specializing in instant noodles and condiments, regarding a potential acquisition.
