Tata Consumer Products on an acquisition spree

Tata Consumer Products , the food and beverage conglomerate, recently announced two new acquisitions, Capital Foods and Organic India for a staggering Rs 7,000 crore. The company will acquire full ownership of Capital Foods for about Rs 5,100 crore and Organic India for Rs 1,900 crore. Subsequently, it announced a Rs 6,500 crore capital raise through a mix of debt (via commercial papers) and a Rs 3,000 crore rights issue. Expanding horizons with two key acquisitions Capital Foods, the entity behind well-known brands such as Ching's Secret and Smith & Jones, specialises in non-Indian cuisine, catering to the burgeoning demand for in-home consumption. The company experienced a remarkable growth spurt between FY20-21, with a three-year revenue growth of 20 per cent annually. However, post FY21-23, the growth rate moderated to about 3 per cent. In contrast, Organic India focuses on high-growth sectors and generates approximately 40 per cent of its revenue from herbal supplements, another 40 per cent from tea and infusions, and the remaining 20 per cent from organic foods. With over 100 products in the health and wellness sector, Organic India's revenue reached Rs 324 crore in FY23. Rationale behind the acquisitions Tata Consumer aims to benefit from these acquisitions as the