Now, Adani eyes acquisitions to push food business, take on Reliance
Adani Wilmar Ltd., the kitchen essentials firm owned by Gautam Adani, is scouting for local and overseas acquisition targets in a bid to doubles down on its efforts to boost the group’s food operations. On August 29, Reliance Industries Ltd’s retail arm, Reliance Retail, had announced plans to venture out into the fast-moving consumer goods (FMCG) business.
“We are looking at acquiring brands in staple foods and distribution companies to boost our consumer goods offering and reach,” Angshu Mallick, MD and CEO at Adani Wilmar, told NDTV in an interview on Wednesday. “We are expecting to conclude a couple of acquisitions by March next year.”
The company has earmarked Rs 5 billion ($62.9 million) from its initial public offering for purchases, Mallick said. Additional funding will come from internal accruals and the 30 billion rupees of planned capital expenditure for next year starting April, he said. The food company’s shares have more than tripled since its $486 million debut in February.
Conglomerates such as Adani Group and billionaire Mukesh Ambani’s Reliance Industries are trying to grab a share of India’s food production industry which is pegged at $400 billion, according to the UN’s Food and Agriculture Organization.
Adani Wilmar recently acquired several brands, including the Kohinoor cooking brand, from McCormick Switzerland for an undisclosed amount. The acquisition gave Adani Wilmar exclusive rights over Kohinoor’s basmati rice and ready-to-cook, ready-to-eat curries and meals in India.
The Adani Group has taken over 32 companies in the past one year. Valued at about $17 billion, many of these acquisitions are outside its core businesses related to coal and infrastructure. Reliance Industries announced its foray into the FMCG, business with the aim of developing and delivering high-quality products at affordable prices. “Going forward, companies have to provide quality of products, value for money and robust distribution network,” Mallick said, adding his company is witnessing 50 per cent growth in e-commerce distribution via Amazon and Flipkart.