Tata Consumer Products Share Gains Momentum as Board Approves Merger with Subsidiaries and Beats Q2 Estimates
The board of directors of FMCG giant Tata Consumer Products Limited (TCPL) has approved a merger with its three wholly-owned subsidiaries: NourishCo Beverages Limited, Tata SmartFoodz Limited, and Tata Consumer Soulfull Private Limited. TCPL announced the merger in a regulatory filing.
TCPL currently holds all of the shares in the transferor companies – NourishCo Beverages Limited, Tata SmartFoodz Limited, and Tata Consumer Soulfull. After reaching a share purchase agreement, TCPL later acquired all of the optionally convertible preference shares of Tata Consumer Soulfull Private Limited (formerly known as Kottaram Agro Foods Private Limited) (“TCSPL”) from its former promoters.
As a result, Tata Consumer Products holds the entire stake in all three transferor companies. The amalgamation will take place without any changes to the shareholding structure of TCPL, as the holding company cannot issue or allot any shares to itself.
The merger is subject to all necessary statutory and regulatory approvals, including the approval of the Hon’ble National Company Law Tribunal under Sections 230 and 232 of the Companies Act, 2013.
Tata Consumer Products Limited is India”s leading FMCG (Fast-Moving Consumer Goods) company with a primary focus on food and beverage categories, including tea, coffee, water, edible salt, spices, protein foods, ready-to-eat and ready-to-drink beverages, and various other consumer products under brands such as Tata Tea, Tetley, Tata Salt, and Tata Sampann, among others.
The company”s operational portfolio includes the manufacturing, marketing, distribution, and sale of consumer products. On November 1, the company announced its FY 2024 Q2 results, beating analyst expectations.
Net profit reached Rs. 359.18 crore, a 1.18 percent increase compared to the same quarter of the previous year. Total revenue witnessed an 11.02 percent jump, reaching Rs. 3733.78 crore from Rs. 3363.05 crore in the corresponding quarter in a year-ago.
The announcement of the amalgamation and positive Q2 results have had a positive impact on the TCPL stock. The company”s share price is currently trading at Rs. 915.45, an intraday rise of 1.66%.
The share has a buy call with a 1-year target price of Rs. 935. Out of a total of 23 coverages, 13 analysts have a buy call on the stock, while 4 advise holding the stock and one analyst has a sell call.
Global brokerage houses are also maintaining a positive outlook on the stock, with Morgan Stanley having an overweight call with a target price of Rs. 933/share.
