The acquisition would give AWL exclusive rights over the brand ‘Kohinoor’ basmati rice along with ‘Ready to Cook’, ‘Ready to Eat’ curries and meals portfolio under the Kohinoor Brand umbrella in India. The brand portfolio comprises “Kohinoor” for premium Basmati rice, “Charminar” for affordable rice, and “Trophy” for the hotels, restaurants, and catering (HORECA) segment.
After this acquisition, AWL will strengthen its position with a 12 per cent market share in basmati rice. AWL’s Fortune had a 6.5 per cent market share and Kohinoor 5.2 per cent.
However, even after the buy, the combined entities will trail the market leaders India Gate, which has a 33 per cent market share, and Daawat, which has about 23 per cent market share.
“The addition of Kohinoor’s domestic brand portfolio strengthens Adani Wilmar’s leadership position in the food FMCG category by augmenting a strong product basket with premium brands along with potential to scale value added products,” Adani Wilmar said in a stock exchange filing.
It added that the acquisition also leverages the reach of the Kohinoor brand “to drive synergies for AWL across geographies and complements the reach of its flagship brand ‘Fortune’ in the food FMCG domain”.
The acquisition will fuel the next level of growth for AWL and widen the portfolio to cater to the premium customer segments across rice and other value-added food businesses, the firm said. The company is poised to become a formidable player with the addition of the Kohinoor brand in the India region, the company said.
The company also said the potential synergies from this acquisition will help AWL increase its reach and consolidate its market share, leverage brand for product extensions and diversification and leverage existing capacities.
“We will continue to look to make more acquisitions in the food space, especially in staples,” Angshu Mallick, Adani Wilmar’s managing director and chief executive officer, told Business Standard. He added that the company will also look at stressed assets in foods to grow.
In the exchange filing, Mallick said this acquisition is in sync with the company’s business strategy to expand its portfolio in the higher margin branded staples and food products segment. “We believe the packaged food category is under-penetrated with significant headroom for growth. The Kohinoor Brand has a strong brand recall and will help accelerate our leadership position in the Food FMCG category,” Mallick was quoted as saying in the release.
The company recently listed on the stock exchanges after a Rs 3,600-crore initial public offering. In its red herring prospectus (RHP), Adani Wilmar said it would utilise Rs 450 crore from its net proceeds towards strategic acquisitions of manufacturing units or brands in the food staples business such as wheat flour, rice, and besan, ready-to-cook, and ready-to-eat segments. It also said that it used IPO proceeds apportioned for M&As.
In FY22, AWL’s consolidated revenue crossed the Rs 50,000 crore-mark and stood at Rs 54,214 crore, compared with Rs 37,090 crore in FY21, registering a 46 per cent growth.