Ramesh J Chauhan, Chairperson of Bisleri International, proposes with the intent to sell a part of his share in the company and is now in conversation with the Tata Group and others about the same.
It was reported this morning that Tata Consumer Products Ltd (TCPL) is attempting to acquire some of the stakes in the nation’s largest packaged water manufacturer for an anticipated amount of Rs 6,000-7,000 crore. According to the source, the present management of the company will be there to assist and continue for two years, as this can be an integral part of the deal.
We are in conversations with Tatas, and other players but cannot divulge details, Mr. Chauhan stated during a meeting. He moved on by adding that he would like to retain some stake, confirming the news of the sale. Bisleri already had a 32% share in the organized market of the category, 150+ manufacturing plants, 4000+ distributors, 5000 trucks, and a great grip in the bottled water category.
The conversation between the two parties lit the fire a few months back.
Earlier this year, in September, the Tata Group proposed a stake in Ramesh Chauhan’s Bisleri International, India’s largest packaged water company. This collaboration can be used to create a bridge for TATA to mark its footprint and stronghold in the packaged drinking water categories involving entry-level, mid-segment, and luxury packaged water. Industry observers predicted at the time that if the purchase was completed, it would give the Tata group FMCG arm a good presence in the speedy growing bottled water category.
The portfolio of the selling firm Bisleri International.
Bisleri International, led by Ramesh J Chauhan, engages in the bottled water sector under the brand name Bisleri and the in the premium category, it is known by the name Vedica. The list moves on with the addition of fizzy drinks under the brands Limonata, Spyci, Fonzo, and PinaColada.
Gold Spot, Maaza, ThumsUp, and Limca, are other such eminent brands who got their origin under the name of Chauhan. These were taken by the Coca-Cola Business in 1993 when the Atlanta-based company made a re-entrance in the Indian market.
Presence of TATA group in the packaged drinking water market.
Under the umbrella named Tata Consumer Products Ltd (TCPL), the Tata Group runs its consumer market. This market is also involved in the sale of packaged mineral water, with the brand Himalayan. The list also comprises Tata Copper Plus Water and Tata Gluco+ in the hydration category. However, the brand Himalayan comes under premium packaged drinking water.
TCPL is the FMCG arm of the TATA group.
TCPL, which was founded by combining Tata Chemicals’ consumer products business with Tata Global Beverages, has marked its presence to be a competitive competitor in the FMCG category by providing quite nice services in present categories and landing its steps in the new ones. TCPL stated in its most recent annual report that “they are quite competent on their pace in the goal of becoming a prominent FMCG company with strong innovative products, investing in strengthening our brands, and strategic acquisitions.
The scenario of the Indian bottled-water market.
According to a report by market research and advisory firm TechSci Research, the Indian bottled water market was worth more than USD 2.43 billion (about Rs 19,315 crore) in FY2021. As per the report, it is predicted to rise at a CAGR of 13.25 percent due to higher disposable income, more health, and hygiene consciousness, and greater innovation in the field of better product development.
Will the TATA group benefit from this acquisition?
This portioned acquisition of Bisleri will allow TATA to make a strong mark over a large client market. Considering Bisleri mineral water extending over multiple channels, these collective channels will provide TATA with the grip to succeed in the bottled drinking water sector. The drinking water sector includes a market that serves the products as readymade drinks through retail outlets, chemist networks, institutional channels like airports, hotels, and restaurants, as well as delivery of bulk-water requirements. TATA will easily gain access to all of these channels.
Coca-Cola India’s Kinley, Bailley from Parle Agro, PepsiCo’s Aquafina, and Indian Railway Catering and Tourism Corporation’s Rail Neer, all these packaged water selling firms compete in the packaged drinking water category, but all lag behind in front of the dominant Bisleri.
The crystal clear image of the Bottled water sector.
The growing popularity of packaged water is due to its low cost and hygienic features. Bottled water is becoming more popular among the public since it is perceived to be cleaner and more hygienic than loose and open water on the market, which is seen as bad for health and harmful to drink, according to the report. Among others rising urbanization and rising per capita income in India are the key drivers of the rising demand for bottled drinking water.
The future of India’s packaged mineral water industry!
Mineral water demand is expected to grow soon in Indian territory. This is because people are becoming more cognizant of the importance of drinking clean water. Furthermore, the expansion of tourism will allow the development of the premium water segment.