Reliance’s consumer products arm is reportedly in advanced talks to acquire a majority stake in Udhaiyams Agro Foods. The Rs 668-crore company makes staples, snacks, and ready-to-cook breakfast mixes.
The deal size has not been officially disclosed. However, according to The Economic Times report, the potential transaction is expected to be mid-sized and is likely to follow the pattern of Reliance’s previous acquisitions. The strategy is to initially enter regional markets and later extend the brands nationally, according to one of the executives.
Chennai-based Udhaiyams competes with Tata Consumer Products, iD Fresh Food, and MTR in regional markets. The report states that its promoters, S Sudhakar and S Dinakar, will continue to hold minority stakes in the company. The parent firm, Shri Lakshmi Agro Foods had incorporated Udhaiyams Agro Foods as an unlisted private company in July this year, with Sudhakar and Dinakar as its founding directors.
This development comes after Reliance Retail recently shifted its FMCG business to New RCPL, a new subsidiary of Reliance Industries. The move aimed at strengthening its packaged consumer business, includes brands like Campa, Sure Water, Spinner sports drinks, Sil Jam, Lotus Chocolate, Alan’s Bugles chips, Velvette, and Tira Beauty.
Notably, Reliance is intensifying its focus on packaged consumer brands, including beverages, foods, personal care, and beauty products and the move is part of that effort. Recently, it announced that Reliance Consumer Products (RCPL), a subsidiary of Reliance Retail, has been dissolved and replaced by New RCPL under a composite scheme of arrangement, effective December 1. Reliance Consumer has also announced Rs 40,000-crore agreement with the government to set up food manufacturing facilities across the country. According to reports, the Mukesh Ambani-backed company reported revenue of over Rs 11,000 crore in FY25.
Large, established consumer companies are facing increasing competition from smaller, faster local and digital-first brands that focus on pricing, direct sales, and quick delivery. These small brands are catching attention of bigger companies and investors. Recently, Honasa Consumer, owner of Mamaearth, acquired BTM Ventures, which owns the men’s personal care brand Reginald Men. Similarly, last month, Godrej Consumer Products bought the male grooming brand Muuchstac.
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