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Rs 7,000 crore for a low-margin biz! What's behind Tata's thirst for Bisleri?

Rs 7,000 crore for a low-margin biz! What's behind Tata's thirst for Bisleri?

The existing liquid beverages portfolio of TCPL complements completely the iconic packaged water brand.

Analysts tracking the sector say TCPL has ambitions in the beverage business with their growing presence through Himalayan water, Tata copper plus water, Tata Gluco and Fruski. Analysts tracking the sector say TCPL has ambitions in the beverage business with their growing presence through Himalayan water, Tata copper plus water, Tata Gluco and Fruski.

The reported buyout of Bisleri International, a brand known for its packaged water, by Tata Consumer Products, a Rs 12,425 crore entity, for Rs 7,000 crore, brings forth key strategic advantages. In one stroke, it fits in well with the existing beverages business of the buyer. 

Tata Consumer Products (TCPL) has a portfolio that has tea, coffee, liquid beverages, foods and out-of-home. The company was earlier known as Tata Tea and then renamed to Tata Global Beverages. Its salt business was carved out from Tata Chemicals. Last year TCPL announced the acquisition of Kottaram Agro Foods, the company that owns Soulfull, a breakfast cereal brand.  

Analysts tracking the sector say TCPL has ambitions in the beverage business with their growing presence through Himalayan water, Tata copper plus water, Tata Gluco and Fruski. One of them points out that Bisleri is an iconic brand, which is synonymous with the category and one that commands a lot of trust. “The whole beverage segment can see a lot of innovation and backed by the Bisleri distribution is certainly a plus for the business," the insider said.

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As a category, bottled water is hugely challenging in terms of low margins and those tracking the sector say that is unlikely to change till value-added beverages form a significant chunk of the overall beverage business. Interestingly, Bisleri too has a small carbonated beverages business with brands such as Spycy, Fonzo, Pina Colada, Limonata, which does not necessarily complement the overall health and wellness imagery of the rest of the beverage portfolio. “It will be interesting to see how the buyer deals with this,” says an analyst. 

Meanwhile, TCPL, in a communique to the stock exchanges, said “it evaluates various strategic opportunities for growth and expansion of the business of the company, on an ongoing basis. Pursuant to this, the management of the company remains in discussions with various parties, including Bisleri International Private Limited.”

Also Read: Bought for Rs 4 lakh, sold for Rs 7,000 crore! Bisleri in 1969 and Bisleri in 2022

Published on: Nov 24, 2022, 2:26 PM IST
Posted by: Smriti Mishra, Nov 24, 2022, 2:13 PM IST