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As the Tata Group merges its consumer businesses to form an FMCG giant, investors are lining up to order

In 1991, Mukul Anand’s Hum had Tiger (Amitabh Bachchan) swinging from chains asking Jumma (Kimi Katkar) for a kiss on a Friday. Jumma chumma de de, went the ditty. For reasons best known to the Indian public, that overt solicitation became wildly popular. In 1996, Tata Tea hit the airwaves with a tamer version — with Javed Jaffrey asking Anu Aggarwal for taazgi (freshness) which sets her off dancing through tea gardens and the factory floor, in a bouncy red dress. 

That cheap imitation marked the company’s first serious attempt to create a brand in the consumer space, to hedge against the volatile commodities’ side. Since then, it has made remarkable progress. Now known as Tata Global Beverages, it is today the market leader in the country, besides being the second largest private producer in the world. Its flagship product, Tata Tea Premium, is one of the largest tea brands in India, and the company rules over the southern states with Chakra Gold, Gemini and Kanan Devan.

This May, the company stepped up its consumption play by announcing a merger with Tata Chemicals’ consumer arm that sells salt, spices, pulses, snacks and nutri-supplements. It means, Tata Global Beverages could well transform into an FMCG giant. Meanwhile, Tata Chemicals will continue life as a chemical pure play, with focus on basic and specialty chemical segments.  

The group has been historically successful in this direction and analysts are already drooling over the projections of the combined entity’s financials, though the merger will take nine to 12 months to complete. Taking into account the financial results of FY19 (See: Powerful mix), the new Tata Global Beverages, which will be called Tata Consumer Products once merged, will have revenue and Ebitda of Rs.90 billion and Rs.11.5 billion respectively. Currently, the company’s topline and Ebitda stand at Rs.72.5 billion and Rs.8.3 billion respectively.


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