On September 6, news reports said Tata Consumer Products was in talks to buy at least 51 per cent in Haldiram’s
Shares of Tata Consumer Products (TCPL) fell 3 per cent to Rs 853.85 on the BSE in Thursday’s intra-day trade after the company denied news reports that it was in talks to buy a stake in Indian food snack chain Haldiram’s. The stock surged over 4 per cent in the previous session following the report about interest in Halidram’s.
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On September 6, news agency Reuters said Tata Consumer Products was in talks to buy at least 51 per cent in Haldiram’s but added was not comfortable with the $10 billion valuation sought.
On clarification on the news report, TCPL said that the company is not in negotiations as reported. “However, the company evaluates various strategic opportunities for growth and expansion of the business of the company, on an ongoing basis. The company will make appropriate announcements, as and when any such requirement arises,” Tata Consumer said.
In an exchange filing, the Tata Group company denied the report. “The company is not in negotiations as reported in the above-referred news article,” said Tata Consumer Products in the filing, referring to the report.
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Haldiram’s, too, denied the same on CNBC-TV18.
Meanwhile, in the past six months, the stock of TCPL has outperformed the market by surging 19 per cent as compared to 9 per cent rise in the S&P BSE Sensex. However, in the past one year, it has underperformed by gaining 4 per cent as against 11 per cent rally in the benchmark index.
TCPL is engaged in the trading, production, and distribution of consumer products mainly tea, coffee, water, salt, pulses, spices, snacks, ready-to-eat packaged foods products etc. collectively termed as branded business. The Group has branded business mainly in India, Europe, US, Canada and Australia. The non-branded plantation business is in India and tea and coffee extraction businesses are mainly in India, Vietnam and the US.
The organised Indian food and beverage market is expected to grow at 10-15 per cent over the next 5 years. In the past 6-12 months, the sector saw significant input cost inflation with the increase in commodity costs impacting overall demand trends, especially in rural markets, Tata Consumer Products said in FY23 annual report.
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Analysts at ICICI Securities believe the market share loss of 110bps and 30bps in India Tea and India Salt to be temporary as North India (key market) was impacted. With multiple initiatives in distribution, extension of regionalisation strategy in Jharkhand and Odisha, and strong investments in innovation, the brokerage firm models market share recovery in FY24-25.
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