As per newspaper reports, Tata group has offered to acquire stake in Bisleri.
- There is no information on the quantum of stake that Tatas have offered to acquire currently. However, as per the said report, Tatas are very keen on this business and eventually they want to scale their stake up.
- Given that Bisleri is majorly promoter (Ramesh Chauhan) controlled, this development may also be due to the succession planning. Chauhan’s daughter is involved in the business, but she also pursues her own interests. Previously, in 1993 also Chauhan had sold famous soft drink brands that he had created – Thums Up, Limca and Gold Spot – to Coca-Cola for about $60 million.
- Entity through which Tatas are targeting this stake acquisition has not been reported. It can be through Tata Consumer or any other group entity.
Bisleri is a well know brand controlling about 32% of India’s organized packaged water market.
- India’s total packaged water market is estimated at Rs 20,000 crore
- Out of this 40% is organized and 60% unorganized
- Bisleri’s size therefore is estimated at about Rs 2,500 crore
Given that the market is majorly unorganized, there is significant growth potential for Bisleri. It already is a strong brand and has a well established network of more than 150 manufacturing plants, over 4,000 distributors with 5,000 trucks across India.
Bisleri + Tata can have significant synergies –
- Bisleri will get advantage of Tata’s reliable customer image, retail network and financial muscle.
- Tatas will get access to a ready go-to-market Bisleri network across retail stores, chemists, hotels, restaurants, airports etc. This can be useful for Tata’s other varied businesses.
Considering everything, the deal does seem to make a lot of sense and seems highly possible.
It’s being speculated that the deal is close to getting finalised at a valuation of Rs 6,000-7,000 crore.
To me, it seems low given how marquee the Bisleri brand is and in general also consumer brands can command a much higher brand valuation (alteast 5-6x of topline).
As per the newspaper reports, the deal has currently got stalled over valuation mismatch.
Bisleri owners were speculated to look for a valuation of about $1bn.
As per newspaper reports the deal has been called off by Tatas as there was no progress over last 6 months.
Seems promoters are not interested for the time being.
Promoter Ramesh Chauhan’s daughter Jayanti Chauhan has decided to take the lead in running the company with the help of the professional management.
Jayanti Chauhan, 42, is currently the Vice Chairperson at the company.