ITC to acquire 24 Mantra Organic brand in a Rs 472 crore deal to boost organic food business

The ITC Limited on Thursday announced it has acquired 100% of the share capital of Sresta Natural Bioproducts that sales under the ‘24 Mantra Organic’ brand, to fortify FMCG major's presence and market standing in the high growth organic products segment in both Indian and overseas markets.

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, said ITC in a stock exchange filing.

As per the statement, the deal will be worth Rs 472.50 crore on a cash-free debt-free basis, subject to customary adjustments as set out in the share purchase agreements, comprising Rs 400 crores payable upfront at closing and up to Rs 72.50 crore payable in the next two years post closing

Diversified conglomerate ITC Ltd reported a 7% year-on-year (YoY) decline in consolidated net profit for the quarter ended December 31, 2024, to Rs 4,935 crore. The profit is attributable to the owners of the company. In the year-ago period, the company had reported a profit of Rs 5,335 crore. Revenues, meanwhile, increased 8% YoY to Rs 20,350 crore.

ITC said Sresta Natural’s vertically integrated supply chain has over 1.4 lakh acres of certified organic land in ten states. It said the Indian organic market, including both domestic and exports, is estimated at Rs 10,000 crore.

The company on Thursday also announced the acquisition of the balance 73.5% stake in Mother Sparsh Baby Care to be done over a period of 2-3 years. ITC already owns 26.5% in the company which had sales of Rs 58.7 crore in 2023-24. ITC had first invested in Mother Sparsh in 2021 to have a presence in the natural, ayurvedic and online space.

ITC said it will make a total investment of around Rs 81 crore in two tranches through a combination of primary subscription and secondary share purchase by the first quarter of 2026-27. Post this, ITC’s total investment in Mother Sparsh will be around Rs 126 crore and the total stake will increase from 26.5% at present to 49.3%. The purchase of balance equity stake will be made by the first quarter of 2027-28 at a valuation to be determined based on pre-agreed criteria.