Tata Consumer Products advances acquisition talks for Bisleri International Private Limited

INDIA – Tata Consumer Products, an Indian fast-moving consumer goods company, is in an advanced stage of discussion to acquire Bisleri International Pvt. Ltd, which commands over 30% of the bottled water market in India.

After owning Bisleri for more than 50 years, Ramesh Chauhan is in talks to sell the packaged water company to Tata Consumer Products Ltd for an estimated Rs 6,000-7,000 crore.

This means a new avenue of a business growth market for Tata Group, as the bottled water market in India valued at US$2,970.61 Million in 2021, is projected to reach US$8923.84 Million by 2029, exhibiting a CAGR of 13% during the forecast period (2022-2029).

Since the bottled water market is a symbol of a new lifestyle and health-consciousness rising in India, the divestment of the water company has also attracted interest from Reliance Industries, Danone, and Nestle.

However, Bisleri’s chairman Chauhan said he opted for Tata Consumer Products Ltd as they would “nurture and take care of it even better”.

Talks with Tata have been going on for two years and he made up his mind after meeting Tata Sons chairman N. Chandrasekaran and Tata Consumer CEO Sunil D’Souza a few months back.

He added that as he has no intention of running the company, he would not keep a minority stake, but would rather invest in environmental and charitable causes.

There is a high battle of thoughts in India if this acquisition of the company by the FNCG giant in India will add strength to its market capitalization.

Some analysts credit that the acquisition can saddle Tata Consumer Products with sizeable debt and place the company in a market segment marked by thin margins, intense competition, and minimal pricing power.

“Packaged drinking water is a high-margin business; therefore, the acquisition of Bisleri will give further traction to its beverage business, and Tata Consumer will become the biggest player in packaged drinking water as it already has the Himalaya brand under it,” said Santosh Meena, Head of Research, Swastika Investmart.

While others say amid intense local competition, counterfeits, and low pricing power, Bisleri may fail to boost Tata Consumer’s profitability.

According to media reports, Bisleri expects to earn Rs 2,500 crore in revenue in FY23. Data from startup data platform Tracxn suggests the company had revenue of Rs 1,472 crore in FY20.

So, while it took the company more than 50 years to expand revenue to Rs 1,472 crore, it is expecting to increase the topline by 70 percent in just three years.

Tata Consumer Products said in a statement: “The Company evaluates various strategic opportunities for growth and expansion of the business of the Company, on an ongoing basis. According to this, the management of the Company remains in discussions with various parties, including Bisleri International Private Limited.”

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