ITC Invests Rs 20 Crore In Babycare Brand Mother Sparsh For 16% Stake
has agreed to invest in babycare and personal care product maker Mother Sparsh as it plans to expand its online footprint.
The Kolkata-based consumer goods firm will buy 16% stake in the company for Rs 20 crore, it said in an exchange filing. The deal will be through a share subscription agreement, it said, and is expected to be completed in two tranches within eight months.
“The acquisition will enable access to the fast growing direct to consumer space in the personal care category, which has been identified by the company as an area of interest," ITC said.
Incorporated in 2016, Haryana-based Mother Sparsh’s revenue has grown from Rs 1.13 crore in FY19 to Rs 15.44 crore in FY21. It retails its products in the direct-to-consumer channel—which has evinced the interest of companies like Hindustan Unilever Ltd., ITC, Marico Ltd. and Tata Consumer Products Ltd.
Such large firms are looking to counter slowing retail sales at physical outlets following the Covid-19 pandemic. One such measure is to acquire or enter into agreements with firms like Mother Sparsh that target online shoppers, engaging with them directly to identify gaps and build products customised for them.
This comes at a time when online shoppers are discovering new brands like Plum, mCaffeine, MyGlamm, Mother Sparsh and The Man Company.
For ITC, the latest investment is in line with its “ITC Next” strategy which aims to build a future ready organisation with a digital-first culture. Over the last few years, ITC has focused on its non-cigarette FMCG business. To develop digital first brands, the diversified conglomerate rolled out its own D2C channel—ITC e-store. As the pandemic rendered closure of stores and crippled movement of goods, ITC scaled the reach of its channel to 15 cities selling 850 products under one roof.
“We believe 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,” Sameer Satpathy, chief executive officer of personal care products business of ITC, was quoted as saying in a statement.