Tata Consumer dips 3% after it denies 51% stake buy buzz in Haldiram's

The company said it evaluates various strategic opportunities for growth and expansion of the business of the company on an ongoing basis

Shares of Tata Consumer Products (TCPL) dipped 3 per cent to Rs 853.85 on the BSE in Thursday's intra-day trade after the company refuted reports that said it is in talks to acquire a majority 51 per cent stake in the snack and sweet brand Haldiram's.

On Wednesday, the stock of Tata Group company had gained 4.4 per cent after Reuters reported that TCPL is in talks to buy at least 51 per cent stake in popular Indian snack food maker Haldiram's but is not comfortable with the $10 billion valuation sought.

On clarification on news report, TCPL said that the company is not in negotiations as reported. "However, the company evaluates various strategic opportunities for growth and expansion of the business of the company, on an ongoing basis. The company will make appropriate announcements, as and when any such requirement arises," Tata Consumer said.

Meanwhile, in the past six months, the stock of TCPL has outperformed the market by surging 19 per cent as compared to 9 per cent rise in the S&P BSE Sensex. However, in the past one year, it has underperformed by gaining 4 per cent as against 11 per cent rally in the benchmark index.

TCPL is engaged in the trading, production, and distribution of consumer products mainly tea, coffee, water, salt, pulses, spices, snacks, ready-to-eat packaged foods products etc. collectively termed as branded business. The Group has branded business mainly in India, Europe, US, Canada and Australia. The non-branded plantation business is in India and tea and coffee extraction businesses are mainly in India, Vietnam and the US.

The organised Indian food and beverage market is expected to grow at 10-15 per cent over the next 5 years. In the past 6-12 months, the sector saw significant input cost inflation with the increase in commodity costs impacting overall demand trends, especially in rural markets, Tata Consumer Products said in FY23 annual report.

Analysts at ICICI Securities believe the market share loss of 110bps and 30bps in India Tea and India Salt to be temporary as North India (key market) was impacted. With multiple initiatives in distribution, extension of regionalisation strategy in Jharkhand and Odisha, and strong investments in innovation, the brokerage firm models market share recovery in FY24-25.