On Friday, Tata Consumer Products Ltd. (TCPL) declared that it has finalized contracts to buy out Capital Foods, the company behind Ching’s Secret and Smith & Jones, and Organic India, the company that makes organic teas and health products and has the support of Fabindia. Although TCPL has not disclosed the price of the Capital Foods transaction, persons with knowledge of the situation informed ET that the company, which produces condiments and instant noodles, has a valuation of ₹5,100 crore. According to TCPL, acquiring Organic India will set you back ₹1,900 crore.

For the next three years, TCPL will buy the remaining 25% of Capital Foods outright and the remaining 75% upfront. The US private equity firm General Atlantic and the Invus Group will sell off their respective 40% and 35% shares. A European family office and investing arm is called Invus. In its edition from January 12, ET was the first to report on both deals.

“This move is consistent with Tata Consumer’s strategic intent to expand its product portfolio and its target addressable market in fast growing/high margin categories,” TCPL stated in a filing with the stock exchange.

“The development is mildly negative for Nestle India as Nestle was also likely one the bidders for Capital Foods and competition in noodles and cooking aids will increase once TCPL acquires Capital Foods as it can scale it up further,” Nuvama Equities wrote in a note.

According to TCPL, Capital Foods possesses robust umbrella platform brands and a diverse range of products for consumption at home in rapidly expanding categories. One such brand is Ching’s Secret, which holds the top spot in the market for desi Chinese products, covering chutneys, blended masalas, sauces, and soups. Italian and other western cuisines can be prepared at home with the help of Smith & Jones.

Through the acquisition, TCPL will be able strengthen its pantry platform and increase the scope of its product line. Significant synergy benefits exist between this firm and TCPL’s current operations in the areas of exports, logistics, distribution, and overheads.

“We think this is a good financial and strategic fit,” stated Sunil D’Souza, the MD and CEO of TCPL. “It will open up significant market opportunities in the fast-growing, non-Indian cuisines segment, leveraging the sales and distribution platform that we have built.”

Shantanu Rastogi, managing director and head, India, at General Atlantic, said: “We have had an amazing partnership with (Capital Foods founder) Ajay Gupta in scaling Ching’s and Smith & Jones. We hope for the best for Ajay and Tata Consumer Products as they move forward with Capital Foods’ expansion.”

Organic India will be entirely acquired by TCPL for ₹1,900 crore in an all-cash transaction. In an exchange statement, TCPL stated, “The board of directors approved the acquisition of up to 100% of the equity share capital of Organic India Pvt Ltd.” “This action aligns with Tata Consumer’s strategic goal to broaden its range of products and reach a larger addressable market in rapidly expanding/high-margin sectors. A platform for wellness and health will be created by this acquisition.”

It is projected that Capital Foods operates in categories totaling Rs 21,400 crore.