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Reliance in Talks to Acquire Majority Stake in Udhayam Agro Foods for ₹668 Crore
Reliance Industries is in talks to acquire a majority stake in Udhayam Agro Foods for ₹668 crore. This deal would be similar to Reliance's deals with Campa soft drinks and Velvet shampoo, in which the company first enters regional markets. Udhayam competes with Tata Consumer Products and MTR. Reliance Retail recently transferred its FMCG business to the new RCPL.
Reliance Industries' consumer products division is in acquisition talks for a majority stake in a ₹668 crore-valued company called Udhayam Agro Foods, which produces ‘everyday food products, snacks, and ready-to-cook breakfast mixes’. As per reports, this acquisition will be considered medium-sized.
With this deal, Reliance will be following up on other deals such as Campa soft drinks and Velvet shampoo. With these kinds of deals, a company enters a regional market before moving to a national level launch.
Chennai−based Udyams rivals other players such as Tata Consumer Products, iD Fresh Foods, and MTR in regional markets. As per reports, promoters S. Sudhakar and S. Dinkar will hold a minority stake in the firm after completing the transaction with Reliance.
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Its parent company, Sri Lakshmi Agro Foods, launched Udyams Agro Foods as an unlisted private entity in July this year, with Sudhakar and Dinkar serving as its founding directors.
Reliance Retail recently transferred its FMCG business to New RCPL, a newly formed direct subsidiary of Reliance Industries. It did this to increase its focus on its packaged consumer business, which includes beverages under Campa, Sure Water and Spinner sports drinks, food brands Sil Jam, Lotus Chocolate, and Allen's Bagels Chips, Velvet Personal Care, and Tiara Beauty.
Large, established companies in the consumer sector are finding themselves threatened by fast-moving local and digital-first brands that compete on pricing, direct distribution, and quick commerce. Smaller players are being wooed by larger rivals and investors.
Some examples include Honsa Consumer, owner of Mamaearth Personal Care, acquiring BTM Ventures, the parent company of men's personal care brand Reginald Men, last week, while Godrej Consumer Products acquired male grooming brand Muuchstac last month.
Dabur recently announced the launch of Dabur Ventures, a ₹500 crore investment platform to acquire digital-first or regional consumer brands. Reliance has also done similar deals before.
