Tata Consumer Products Ltd. has approved raising funds to the tune of ₹6,500 crore through the issue of commercial papers and a rights issue, the Tata Group company said in an exchange filing.
Through the issue and allotment of commercial papers, the company plans to raise ₹3,500 crore, which will be used for bridge funding to facilitate the payment of consideration for the proposed acquisition of stakes in Capital Foods Pvt. Ltd. and Organic India Pvt. Ltd.
The company will also raise up to ₹3,000 crore through a rights issue, the issue price, entitlement ratio, record date and timing will be determined in due course of time.
Last week, Tata Consumer Products had announced the acquisition of a 100% stake in Capital Foods, the owner of the brand Ching’s Secret and Smith & Jones for ₹5,100 crore. Additionally, it also announced the acquisition of Organic India for ₹1,900 crore, marking its foray into the health and wellness category.
In an exclusive interaction with CNBC-TV18 post the deals, Tata Consumer MD & CEO Sunil D’Souza said that these acquisitions will boost shareholder value.
He also highlighted an immediate margin synergy of 400 basis points with Capital Foods, which can see steady margin upwards of 25%.
D’Souza also shared plans to raise funds via either CPS or a rights issue for these acquisitions to raise enough capital for future inorganic growth. While the company is not currently in talks with any prospective acquisitions, it remains open to more.
Shares of Tata Consumer Products have surged to the day’s high, currently trading 1.1% higher at ₹1,158.95.
(Except for the headline, this story has not been edited by Universal Times Magazine staff and is published from a syndicated feed.)
