ITC to Expand Presence in Frozen Foods Market with 100% Acquisition of Prasuma

On February 6, 2025, ITC Ltd announced the acquisition of Prasuma, a leading player in the frozen, chilled and ready to cook foods space in India. For this, the company has signed definitive agreements. ITC further stated that this acquisition will further fortify its presence in these future-facing categories, with current annual market size of over ₹10,000 crore and poised for rapid growth in the years ahead.

Prasuma, a specialist in oriental cuisine (viz. momos, baos, Korean fried chicken), high quality delicatessens and raw meats, etc., sells a wide assortment of 170+ products, backed by unparalleled innovation expertise in developing ‘Good-for-You’ products.

Acquisition Structure

ITC will acquire a 100% stake in Prasuma over a 3-year period. The initial acquisition will involve purchasing a 43.8% stake upfront, with the remaining stake to be acquired in subsequent tranches by June 2028. The acquisitions will be based on pre-defined valuation criteria and subject to the terms outlined in the definitive agreements.

• The initial 43.8% equity stake will be acquired through a combination of primary subscription and secondary purchases for an investment of approximately Rs. 131 crore. This is expected to close by March 2025, pending the fulfillment of closing conditions.
• ITC’s equity stake will increase to 62.5% by April 2027, with secondary purchases worth Rs. 56 crore, based on a pre-agreed pre-money valuation.
• The remaining 37.5% stake will be acquired within 3 years, in line with the pre-agreed valuation criteria.

Objective Behind the Acquisition

• Expand presence in the General Trade and Food Service channels
• Enhance manufacturing and logistics efficiencies
• Leverage consumer insights for new product development and culinary expertise
• Achieve cost efficiencies in areas such as agricultural inputs, packaging, and media.

Commenting on this acquisition, Mr. Hemant Malik, Wholetime Director, ITC Limited stated, “We are delighted to back Prasuma and look forward to jointly building an unparalleled, full stack frozen, chilled and ready to cook foods portfolio. With Good-for-You, first-to-market products, across cuisines, we believe that the combined portfolio will delight our discerning consumers. This investment reaffirms our commitment to building future facing, best in class, innovative portfolios.”

Commenting on this transaction, Ms. Lisa Suwal, CEO and Mr. Siddhant Wangdi, COO of Prasuma, said, “We are extremely proud of what we have built and excited to join hands with ITC to drive the next phase of growth. The overwhelming support and love for our products from consumers have always inspired us. ITC shares our commitment to quality and innovation, making them the perfect partner. Frozen food is a category of the future. With Prasuma’s strength in manufacturing and innovation, combined with ITC’s expertise in distribution and building new-age brands, we are excited about the significant value that this collaboration will create for consumers in India and globally.”

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