ITC acquires minority stake in FMCG vending machine start-up

ITC Ltd is going to acquire up to 33.42% stake in home grown start-up Delectable Technologies which is in the business of fabricating vending machines and application based sale of FMCG products through such machines, the company has informed the stock exchanges.

The Kolkata-based conglomerate said this will strengthen presence of ITC's FMCG products in the emerging distribution channel of vending machines. ITC has said it will complete the acquisition within 12 months in an all-cash deal. The size of the deal is Rs 7.5 crore which will be paid in four tranches over a period of 12 months.

In the notification, ITC said Delectable is a start-up founded by IIT-graduate Satvik Sarwarde in 2014 which had raked sales of Rs 69.15 lakh in 2018-19. The company’s net worth as on March 31, 2019, was Rs 1.48 crore.

Though the deal was announced after trading hours, the ITC scrip on Wednesday closed 2.08% lower at Rs 253.95 on the Bombay Stock Exchange on a day when the benchmark Sensex closed 0.57% down.

ITC is India’s largest cigarette manufacturer accounting for 75% of the legalised market, is amongst the top three packaged food maker, the second largest hotel chain and an emerging brand in the personal care space.

The company is expanding fast in the FMCG space to de-risk itself from the increasing government action against cigarettes and wants to emerge as the country’s largest FMCG maker by 2030.