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ITC (NSE:ITC) Limited has taken a strategic leap in the organic foods segment by executing Share Purchase Agreements to acquire 100% stake in Sresta Natural Bioproducts Private Limited (SNBPL), a pioneer in the organic packaged staples category. This move aligns with ITC’s vision to expand its presence in high-growth and health-conscious food categories, both in India and overseas.
SNBPL operates in the food products industry, with a strong focus on organic offerings. The company boasts an expansive base of approximately 27,500 farmers and around 1.4 lakh acres of certified organic land, spread across 71 clusters in 10 Indian states. The acquisition includes SNBPL’s wholly owned subsidiaries — Fyve Elements LLC (USA) and Sresta Global FZE (UAE) — providing ITC a ready international footprint, especially in the US organic foods market where SNBPL has its own distribution network.
The total consideration for the acquisition is up to INR 472.5 crore, of which INR 400 crore will be paid upfront at closing, and INR 72.5 crore may be paid over the next 24 months, subject to certain conditions. The transaction is expected to close in the first quarter of FY25 - 26, or a later date as agreed.
This acquisition is a timely step for ITC to capitalize on the growing demand for organic food products, driven by rising health awareness, growing disposable incomes, and the proliferation of modern retail and e-commerce channels.
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However, from an investment lens, it’s important to assess the valuation. According to InvestingPro’s fair value feature, ITC currently has a fair value of INR 421.7 per share, reflecting a 1.3% downside from its current market price of INR 427.2. This proprietary tool aggregates multiple financial models to provide a realistic estimate of a stock’s intrinsic value — helping investors make well-informed decisions.
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Read More: Catching Quality at a Discount: Discover ‘52-Week Low Bargain Hunter
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