Tata Consumer and ITC companies among to buy into Fabindia-backed Organic India
Tata Consumer Products and ITC Foods are among select companies that have started talks to acquire a significant stake in Fabindia-backed organic teas and health products maker Organic India, executives directly aware of the developments said. Tata Consumer or ITC could either buy Fabindia's stake or acquire a fresh stake in Organic India, they stated. "After its buy-out talks with mineral water maker Bisleri fell through earlier this year, Tata Consumer has been actively scouting for acquisitions in the foods and beverages space, especially in the health and wellness category," one of the executives said.
Details of the negotiations and likely valuation of the Lucknow-based maker of a wide range of premium organic teas and foods supplements could not be ascertained. Fabindia is backed by Premji Invest and Lighthouse Capital and owns over 40% stake in Organic India. Spokespersons of Tata Consumer Products and ITC, in response to ET's query, said they do not comment on market speculation. An email sent to a Fabindia spokesperson seeking comment elicited no response until press time.
The executives quoted above also said that Organic India is being actively pursued by Tata Consumer Products, ITC, and a few other packaged consumer goods companies. Organic and wellness products have been growing in high-double digits, especially post Covid-19, and are forecasted to reach ₹75,000 crores by 2025, according to the 'Indian Organic Sector Vision 2025' report by the commerce ministry. This market is expected to grow as much as 16-18% a year till 2026-27.
