Tata Consumer Products (TCPL) has unveiled plans to generate Rs 3,500 crore through debt issuance to finance its recent acquisitions, namely Capital Foods and Organic India. In a board meeting held on Friday, the company obtained approval for the "raising of funds through the issuance and allotment of Commercial Papers, for an amount not exceeding ₹3,500 crore." This financial infusion is designated for bridge funding, facilitating the timely payment required for the two prospective acquisitions, as outlined in a regulatory filing by Tata Group's FMCG arm.
TCPL, in a noteworthy development last week, disclosed its acquisition of Capital Foods, the proprietor of popular brands like Ching's Secret and Smith & Jones. The enterprise valuation for this acquisition stands at ₹5,100 crore. Additionally, TCPL announced the acquisition of Organic India, which specializes in the health and wellness category and is supported by Fab India. The enterprise value for the Organic India acquisition is estimated at ₹1,900 crore.
The decision to raise funds through the issuance of Commercial Papers underscores TCPL's strategic approach to ensure financial liquidity for its recent acquisitions. This move aligns with the company's expansion and diversification strategy, as it seeks to strengthen its portfolio with the inclusion of well-established brands in the food and wellness sectors.
The infusion of Rs 3,500 crore will serve as a bridge to enable seamless financial transactions associated with these acquisitions, positioning TCPL for continued growth and market leadership in the fast-evolving consumer products landscape.
