Rs 7,000 crore for a low-margin biz! What’s behind Tata’s thirst for Bisleri?

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The news of Rs 7,000 crore acquisition of packaged water brand Bisleri International by Rs 12,425 crore unit Tata Consumer Products brings to the fore key strategic advantages. At a stroke, it fits well with the buyer’s existing beverage business.

Tata Consumer Products (TCPL) has a portfolio that includes tea, coffee, liquid beverages, food items and out-of-home products. The company was earlier known as Tata Tea and then its name was changed to Tata Global Beverages. Its salt business was spun off from Tata Chemicals. Last year, TCPL announced the acquisition of Kottaram Agro Foods, which owns Soulful, a breakfast cereal brand.

Analysts tracking the sector say TCPL has ambitions in the beverages business with its growing presence through Himalayan Water, Tata Copper Plus Water, Tata Gluco and Fruski. One of them points out that Bisleri is an iconic brand, synonymous with the category and has a lot of trust. “A lot of innovation is likely to be seen across the beverage segment and being supported by Bisleri distribution is definitely a plus for the business,” the insider added.

As a category, bottled water is extremely challenging given its low margins and sector watchers say this is likely to change until value-added beverages become a significant part of the overall beverage business. Not there. Interestingly, Bisleri also has a small carbonated beverage business with brands like Spicy, Fonzo, Pina Colada, Limonta, which don’t necessarily complement the overall health and wellness spec of the rest of the beverage portfolio. “It will be interesting to see how buyers deal with this,” says an analyst.

Meanwhile, TCPL said in a release to the stock exchanges, “It evaluates various strategic opportunities for growth and expansion of the company’s business on a continuous basis. Pursuant to this, the management of the company has been decided by various parties including Bisleri International Pvt. is in discussion with.

Read also: Bought for Rs 4 lakh, sold for Rs 7,000 crore! Bisleri in 1969 and Bisleri in 2022

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