Kolkata-based Madhu Jayanti International Pvt. Ltd. (MJIPL) said it sees major gains in the acquisition of tea packet brands of Eveready Industries India Ltd., through a national footprint, especially in rural areas where the brands are well-distributed via EIIL’s distribution channels.
Wider price range
“We expect this buy to give us a single-shot entry into the rural areas and tier 1 and tier 2 towns in 14 States, where we do not have a big presence now. It will also allow us to offer products at a wider price range,” Sumit Shah, executive director, MJIPL, said at a press meet.
The ₹6-crore acquisition is set to be formalised on July 4.
Mr. Shah said that he did not expect the turn of events at EIIL, where PwC has stepped down as auditor, to cast any shadow on the forthcoming deal.
The 75-year-old MJIPL’s business comprises packet teas, tea bags and private labels, with exports at ₹261 crore in 2018-19 accounting for a bulk of its ₹390-crore turnover in 2018-19.
The company sees its ₹129-crore domestic business rising to ₹350 crore in five years.
It hopes to utilise EIIL’s distribution channels to sell its tea in rural areas too. MJIPL has tea packaging plant in Kolkata, Guwahati, Coimbatore and Vladivostok in Russia.
In a regulatory filing with exchanges, Eveready Industries India Ltd. said that it would enter into an asset transfer/assignment, licence agreement with Madhu Jayanti International for transfer and/or licence of the relevant trademarks, valued at ₹6 crore and other identified assets relating to packet tea products.
