Tata Consumer Products (TCP) announced in an exchange filing on Friday that it has signed definitive agreements to acquire Fabindia-backed Organic India and Capital Foods, owner of the brands Ching’s Secret and Smith & Jones, to expand its product portfolio.

The Tata Group Company will acquire a 100% stake in Organic India in an all-cash deal for Rs 1,900 crore, while the acquisition of Capital Foods will be in a phased manner for Rs 5,100 crore. Tata Consumer will acquire 75% of the equity shareholding upfront, and the balance 25% of the share capital will be acquired within the next three years.

The Total Addressable Market for the categories in which Capital Foods operates is estimated at Rs 21,400 crore, while the overall size of the categories that Organic India is present in is Rs 7,000 crore in India and Rs 75,000 crore in international markets. 

Mumbai-based Capital Foods has a strong umbrella portfolio of unique products for in-home consumption in fast-growing categories with manufacturing facilities in Nasik, Kandla and Vapi. 

Backed by FabIndia, Organic India is in the business of packaged organic teas, herbal products and health supplements and has a geographical footprint covering over 48 countries. 

Tata Consumer Products will reportedly announce a Rs 3,500 crore rights issue to fund the acquisition. The remaining half is expected to be funded through internal accruals of the Tata Group’s FMCG arm.