ITC seals deal to buy organic packaged foods brand 24 Mantra owner

Indian conglomerate ITC has struck a deal to acquire Sresta Natural Bioproducts, the owner of the 24 Mantra Organic brand, for Rs4.73bn ($55.2m).

In a stock-exchange filing published, ITC said it expects the deal to be finalised in the first quarter of its 2025/26 financial year, a three-month period that ends in June.

Under the terms of the deal, ITC will pay Rs4bn upfront to Sresta Natural when the transaction closes on a “cash-free, debt-free basis”.

An additional “founders consideration” of up to Rs725m is payable over the next two years, contingent on undisclosed “pre-agreed performance criteria”, ITC said.

Hemant Malik, an ITC director, said: “24 Mantra Organic has built a robust backend and sourcing network which is core to its trusted organic products portfolio.”

He added: “We are confident that 24 Mantra Organic will fortify ITC’s presence and market standing in the high growth organic products space, in both Indian and overseas markets.”

Set up in 2004, Sresta Natural Bioproducts has a product range that includes more than 100 organic items across categories such as grocery staples, spices, condiments, edible oils, and beverages, ITC said.

Sresta Natural reported a consolidated turnover of Rs3.06bn for its 2023/24 financial year.

Approximately 50% of its revenue was generated from international markets, mainly the US, the filing said.

The company’s sourcing base includes approximately 27,500 farmers cultivating around 140,000 acres of organic farmland across ten Indian states.

Rajashekar Reddy Seelam, the founder and managing director of Sresta Natural, will remain “associated” with the business for two years to support the transition following the acquisition.

Seelam said: “After 21 years of partnering with Indian farmers to create trusted organic products, we are excited that ITC will be driving the next phase of growth for 24 Mantra Organic.

“We are confident that ITC’s strengths in product development expertise and distribution strength across channels will help in taking 24 Mantra Organic to millions of homes for many generations to come, improve livelihoods of large number of farmers across the country and carry forward our legacy of ecological stewardship.”

The Indian organic food market, including domestic and export segments, is estimated to be worth Rs100bn, the conglomerate said.

ITC said organic food was “an area of interest” to the company “given the strong synergistic linkages” with its existing packaged foods business and the sector’s “immense growth potential”.

Furthermore, the deal is expected to enable ITC to utilise its “institutional strengths to drive synergies” in areas including NPD, sourcing and manufacturing.

In February, ITC agreed to acquire fellow Indian business Prasuma to strengthen its presence in frozen, chilled and ready-to-cook foods.