Cigarette-to-FMCG-to-hotel major ITC on Friday said it has agreed to acquire a 16% stake in Mother Sparsh Baby Care, an ayurvedic and natural personal care brand in the direct-to-consumer (D2C) space, for Rs 20 crore.
The company entered into a share subscription agreement to acquire a 16% of the share capital of Mother Sparsh, a start-up, on a fully diluted basis, subject to completion of conditions precedent, and a shareholders’ agreement in connection with such proposed acquisition, ITC said in a stock exchange filing.
This acquisition will enable access to the fast-growing D2C space in the ‘personal care’ category, which has been identified by the company as an area of interest, it added. This share acquisition of the start-up is expected to be completed in two tranches, within eight months from the date of execution of the agreements. The turnover of the start-up, which has focus on mother and baby care segments, was `15.44 crore in the last fiscal. It was incorporated in February 2016.
ITC said, this investment is in line with the ‘ITC Next’ strategy articulated by chairman Sanjiv Puri that aims to build a future-ready organisation with a digital first culture. Commenting on the development, Sameer Satpathy, chief executive, personal care products business, ITC, said, “We believe that this investment provides an exciting opportunity which is in alignment with our aspiration to have a significant play both in the naturals and ayurvedic segment as well as in the D2C channel. Mother Sparsh has, within a short span of time, evolved into an effective D2C brand with a range of innovative products and a lot of promise.”