Tata Tea Plans To Merge Bambino Invest With Itself

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Tata Tea is planning to merge its wholly owned investment subsidiary Bambino Investment & Trading Company with itself. The board of will meet on September 27 to consider the proposal

The cash-rich Bambino Investments has significant holdings in other group companies such as Tata Chemicals, Tata Industries, Titan, FAL Industries (a subsidiary of Forbes Gokak) and another group investment arm Tata Investment Corp.

Bambino also held a significant portion of the Tata group's holding in The Associated Cement Company which it has now divested, allowing it to net over Rs 65.5 crore last year.

The merger would considerably shore up Tata Tea's reserves as Bambino is sitting on a cash of over Rs 100 crore. The move could be critical as Tata Tea may want to expand its global operations through Tetley, analysts said.

No Tata Tea official was however available for comment on the merger move.

While Tata Tea's post-tax profits declined last year to Rs 100.2 crore from Rs 124.6 crore in the previous year, the Rs 73-crore Bambino saw its net shoot up to Rs 69.55 crore from Rs 50.65 crore in the previous fiscal.

Bambino also holds a large chunk of the Tata group's holding in Tata Chemicals with almost 78 lakh shares in its kitty, representing 4.3 per cent of the company's equity.

Tata Tea has already made over Rs 450 crore of direct equity investment in its acquisition of the UK-based Tetley Group, the world's second-largest tea company.