ITC to acquire packaged food product brand Mantra Organic for Rs 472.5 crore

Over the cost of acquisition, ITC said it is up to Rs 472.50 crore on a cash-free debt-free basis.

ITC on Thursday said it will acquire Sresta Natural Bioproducts, engaged in the manufacturing and sale of organic packaged food products under the 24 Mantra Organic brand, for about Rs 472.50 crore.

ITC said in a regulatory filing that it has signed a share purchase agreement to acquire a 100 per cent stake in Sresta Natural Bioproducts Private Limited (SNBPL).  The acquisition is "in line with the strategy to augment the company’s future-ready portfolio, the transaction will fortify ITC's presence and market standing in the high-growth organic products segment in both Indian and overseas markets," it added.

"The share acquisition is expected to be completed in Q1 of FY 2025-26 or such later date as may be mutually agreed upon by the Parties," ITC said. Over the cost of acquisition, ITC said it is up to Rs 472.50 crore on a cash-free debt-free basis. "The share purchase agreements, comprising Rs 400 crore payable upfront at closing and up to Rs 72.50 crore payable in the next 24 months post Closing," it said.

SNBPL’s portfolio comprises a wide range of 100+ organic products spanning branded grocery staples, spices and condiments, edible oils, beverages, etc. SNBPL has a strong international presence with a deep connection with the Indian diaspora. SNBPL’s vertically integrated supply chain promotes sustainable livelihoods for its network of approximately. 27,500 farmers spread across approximately. 1.4 lakh acres of certified organic land in 10 states. The strong network of farmers and certified organic sourcing capability are key sources of competitive advantage for the company.

This investment is in line with the ‘ITC Next’ strategy articulated by Chairman, Mr. Sanjiv Puri, that focusses also on building a future-ready portfolio of products that serve evolving consumer needs.

Commenting on this acquisition, Hemant Malik, Wholetime Director, ITC Limited, stated, “We are excited to have 24 Mantra Organic as part of ITC’s Foods Business’s portfolio of nutrition-led healthy foods products. 24 Mantra Organic has built a robust backend and sourcing network, which is core to its trusted organic products portfolio. Aligning with national priorities, we are confident that 24 Mantra Organic will fortify ITC’s presence and market standing in the high-growth organic products space, in both Indian and overseas markets”.

Rajashekar Reddy Seelam, Founder & Managing Director, SNBPL, stated, “After 21 years of partnering with Indian farmers to create trusted organic products, we are excited that ITC will be driving the next phase of growth for 24 Mantra Organic. ITC shares a common vision to promote sustainable livelihoods for farmers and ensure healthy lifestyle for consumers. We are confident that ITC’s strengths in product development expertise and distribution strength across channels will help in taking 24 Mantra Organic to millions of homes for many generations to come, improve livelihoods of large number of farmers across the country and carry forward our legacy of ecological stewardship”