No material impact from IT survey operations, says Marico; shares up 1%

Marico said there is currently no material impact from the survey operations conducted by sleuths from the Mumbai investigation wing of the Income Tax in some of Marico’s offices, the FMCG company said in an exchange filing. Despite the news of the survey operation, Marico shares were trading 1.26% higher on the BSE at ₹721.30 apiece.

The company stated that the proceedings are underway and is extending its full cooperation to the authorities. It is not immediately clear about the details of the survey operation. However, media reports suggest that as many as 200 income tax officials have been deployed to various Marico facilities. Fortune India could not independently verify the claims.

Unlike a raid, a survey operation entails an unannounced inspection of a company’s facilities by the Income Tax Department, albeit that the IT sleuths do not have the authority to search and seize. A survey operation is generally done to collect information on suspected irregularities possibly committed by a company.

Earlier this month, Marico announced that it would acquire the remaining 46% stake in HW Wellness Solutions Pvt. Ltd, the maker of health food brand “True Elements”, thereby taking full ownership of the company. The deal, valued at around ₹138 crore, will be completed on or before September 30, and is contingent on certain conditions, reads an exchange filing from Marico.

Marico first invested in HW Wellness in May 2022 by acquiring a 53.98% majority stake in the Pune-based startup. With this transaction, Marico’s holding in HW Wellness will rise from 53.98% to 100%, making it a wholly-owned subsidiary. “The current transaction is towards the acquisition of the remaining equity stake in HW Wellness, upon completion of which it will become a wholly owned subsidiary of the company,” the release noted.

The move is aimed at strengthening Marico’s presence in the fast-growing health and wellness foods segment and accelerating its digital transformation journey, the company said. “The strategic investment in HW Wellness has enabled Marico to scale its presence in healthy breakfast and snacking categories while adding another digital-first brand with a strong and differentiated proposition to its portfolio,” it added.

For the April–June quarter of the current fiscal, Marico reported revenue of ₹3,259 crore, up 23% year-on-year, with underlying volume growth of 9% in its India business and constant currency growth of 19% in its international business. Net profit rose 9% year-on-year to ₹504 crore in the first quarter.