Shares of Hindustan Foods Ltd rallied 4% on 25 September after the company announced its plans to merge a promoter-owned company to increase its manufacturing footprint to Nashik, Maharashtra. 

The promoter Avalon Cosmetics (ACPL) is the owner of the aforementioned unit, which is located in Sinnar MIDC in Nashik. 

Smith & Nephew Private Limited, an Indo-German joint venture, sold this factory to ACPL in 2007–2008. Situated on 16 acres of land in Sinnar’s MIDC, the facility spans over 100,000 square feet of built-up area. It is a food production plant that produces over 5,000 tons of soups, meal makers, energy drinks, and other dry powder items annually for large FMCG companies in India.

At a meeting on 24 September 2024, the board of directors decided to demerge ACPL’s Nashik facility into Hindustan Foods in order to encourage corporate consolidation and take advantage of recent improvements. 

Sameer Kothari, Managing Director of Hindustan Foods, said, “The promoters who have been engaged in contract manufacturing business even before acquiring HFL have taken various steps to ensure that all operations are consolidated in Hindustan Foods Limited. This is one step in that direction which will ensure enhanced management focus and growth in scale and operations. Furthermore, as previously announced, the establishment of a new Ice Cream facility in Nashik will optimise the use of industrial land, paving the way for future growth and diversification.” 

To further streamline the promoters’ assets, the board has chosen to merge the holding company with HFL. As a result, the shareholding pattern will become more evident.

However, at 12:47 pm, the shares of Hindustan Foods shed all their early gains and were trading 2.91% lower at Rs 632.05 on NSE.

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