ITC on acquisition spree: Buys majority stake in Mother Sparsh, 24 Mantra Organic for ₹554 cr

Hotels-to-consumer-conglomerate ITC has announced two more acquisitions as part of its strategy to expand its dominance in the fast-moving consumer goods (FMCG) sector. The conglomerate has inked a deal to acquire 100% stake in Sresta Natural Bioproducts Pvt Ltd, the owner of 24 Mantra Organic, while it plans to increase its shares in Mother Sparsh Baby Care to complete ownership. The total value of deals is ₹553.5 crore - ₹472.5 crore for Sresta Natural Bioproducts and ₹81 crore for Mother Sparsh. Last month, the company signed a deal with Aditya Birla Real Estate Limited (ABREL), the realty arm of the Aditya Birla group, to buy its pulp and paper businesses for ₹3,498 crore via a slump sale. 

In an exchange filing last evening, ITC said that its board in a meeting on April 17 approved a proposal to sign share purchase agreements for acquisition of 100% stake in Sresta Natural Bioproducts Private Limited. The board also gave nod for acquisition of 73.50% of the share capital of Mother Sparsh Baby Care. ITC currently holds 26.50% shareholding in Mother Sparsh.

As per the company, this investment is in line with the ‘ITC Next’ strategy articulated by Chairman, Sanjiv Puri, that focusses also on building a future ready portfolio of products that serves evolving consumer needs.

“In line with the strategy to augment the company’s future ready portfolio, the transaction will fortify ITC’s presence and market standing in the high growth organic products segment in both Indian and overseas markets,” the release noted.

Acquisition of Sresta Natural Bioproducts to complete in Q1 FY26

The acquisition of Sresta Natural Bioproducts is expected to be completed in Q1 of FY26, and the cost of the deal is ₹472.50 crore on a cash-free debt-free basis, subject to customary adjustments as set out in the share purchase agreements. The transaction includes ₹400 crores payable upfront at closing and up to ₹72.50 crore payable in the next 24 months.

Sresta Natural Bioproducts Private Limited (SNBPL) is an Indian company primarily engaged in the business of manufacture and sale of organic packaged food products under the ‘24 Mantra Organic’ brand in the domestic as well as in international markets. It has two wholly owned subsidiaries - Fyve Elements LLC, USA and Sresta Global FZE, UAE.

“Aligning with national priorities, we are confident that 24 Mantra Organic will fortify ITC’s presence and market standing in the high growth organic products space, in both Indian and overseas markets,” said Hemant Malik, Wholetime Director, ITC.

To acquire remaining 73.5% stake in Mother Sparsh in 2-3 years

ITC plans to acquire the balance 73.5% stake in Mother Sparsh Baby Care Private Limited (Mother Sparsh), an associate company, over a period of 2-3 years. The acquisition is expected to unlock future growth opportunities by filling in whitespaces in the personal care products portfolio and will be scaled up further, leveraging the institutional strengths of ITC.

The conglomerate had first invested in Mother Sparsh in 2021 with the aspiration of having a significant play in the natural and ayurvedic segment as well as in the digital online space. With follow on rounds of investment, ITC currently holds 26.5% stake in Mother Sparsh.

“Reinforcing ITC’s commitment to build a portfolio of winning brands that addresses the needs of Indian consumers including those seeking specialized solutions, Mother Sparsh will augment the innovative range of the Company’s Personal Care Products Business,” as per the release.

The baby care segment in India is under-penetrated and under-served providing ITC the opportunity to scale up and build a category of the future. The size of the baby care category in India is estimated to be appx. ₹3000 crore per annum.

Mother Sparsh is a premium baby care brand, offerings range of straddles baby personal care, baby health and hygiene and baby expert products. The company has adopted a digital first strategy and has a focused offline presence in baby stores.