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ITC Completes Acquisition of 24 Mantra Organic: A Major Leap into India’s Organic Food Market
Business - June 16, 2025

ITC Completes Acquisition of 24 Mantra Organic: A Major Leap into India’s Organic Food Market

ITC Completes Acquisition of 24 Mantra Organic: A Major Leap into India’s Organic Food Market

With the purchase of Sresta Natural Bioproducts, ITC expands its portfolio, strengthens its farm-to-table supply chain, and sets sights on global organic food leadership.

Introduction
India’s organic food industry has seen rapid expansion, fueled by rising health consciousness, evolving consumer tastes, and a global move toward sustainable farming practices.
In a move that underscores the sector’s potential, ITC Limited has finalized the acquisition of Sresta Natural Bioproducts Private Limited (SNBPL), the company behind the widely recognized 24 Mantra Organic brand. The transaction, completed on June 13, 2025, is set to reshape the competitive landscape of organic foods in India.

Deal Structure and Financial Details
The acquisition was carried out as an all-cash transaction, free of both debt and existing cash balances.
ITC acquired a full 100% stake in Sresta Natural by paying an upfront amount of ₹400 crore, with an additional ₹72.5 crore linked to the achievement of specific performance targets over the next 24 months. This takes the total potential deal value to ₹472.5 Cr.
As part of the acquisition, Sresta Natural’s overseas subsidiaries in the United States and the United Arab Emirates have also become step-down wholly owned subsidiaries of ITC, expanding the conglomerate’s international footprint in the organic sector.

Why Sresta Natural and 24 Mantra Organic?
A Pioneer in Organic Foods
Established in Hyderabad, Sresta Natural Bioproducts has been a pioneer in the organic packaged food industry.
Its flagship brand, 24 Mantra Organic, is a household name across India and enjoys a growing presence in international markets. The company’s portfolio spans over 100 organic products, including staples, spices, condiments, edible oils, and beverages.
Robust Farmer Network
One of Sresta’s key strengths is its direct sourcing model, working closely with approximately 27,500 farmers across 10 Indian states. This extensive network ensures traceability, quality, and a reliable supply of organic raw materials—an asset that ITC can now leverage to build a resilient farm-to-table supply chain.

Strategic Rationale for ITC
Expanding the Foods Portfolio
ITC has been consistently growing its packaged foods portfolio, and the inclusion of 24 Mantra Organic meaningfully enhances its product range.
The organic segment is one of the fastest-growing categories in India’s food industry, and this acquisition instantly gives ITC a leadership position.
Strengthening Sustainability and Brand Equity
The move aligns with ITC’s commitment to sustainability, responsible sourcing, and health-focused products. By integrating 24 Mantra Organic’s established brand and ethical sourcing practices, ITC enhances its credentials among health-conscious and environmentally aware consumers.
International Growth Ambitions
With Sresta’s established presence in the US and UAE, ITC now has a ready platform to accelerate its global ambitions in the organic foods space. The acquisition opens doors to new markets and export opportunities, leveraging the growing global demand for Indian organic products.

Market Impact and Industry Response
Following the acquisition, ITC’s shares have seen renewed investor interest, with analysts highlighting the strategic fit and long-term growth prospects. The deal is expected to intensify competition in the organic foods segment, prompting other FMCG majors to ramp up their own organic offerings.
Industry observers note that ITC’s robust distribution network, marketing muscle, and deep pockets could help scale the 24 Mantra Organic brand to new heights, both in India and internationally.

The Road Ahead: Integration and Growth
ITC has announced that Sresta Natural and its subsidiaries will operate as wholly owned subsidiaries, ensuring business continuity while benefiting from ITC’s resources and expertise. The integration process will focus on expanding product reach, enhancing supply chain efficiencies, and driving innovation in the organic foods category.
With the organic food market projected to grow at double-digit rates in the coming years, ITC’s timely acquisition positions it at the forefront of a sector poised for explosive growth.

Conclusion
ITC’s takeover of Sresta Natural Bioproducts and the 24 Mantra Organic brand represents a pivotal development for the company as well as a significant milestone for India’s organic food sector. By combining Sresta’s pioneering legacy and farmer network with ITC’s scale and vision, the deal promises to deliver value to consumers, farmers, and shareholders alike. As health and sustainability become central to food choices, ITC is now well-placed to lead India’s organic revolution at home and abroad.

 

Meta Description
ITC Limited, one of India’s largest diversified conglomerates, has officially completed its acquisition of Sresta Natural Bioproducts, the owner of the renowned 24 Mantra Organic brand. This all-cash deal, valued at up to ₹472.5 crore, marks a significant milestone in ITC’s strategy to capture the rapidly growing organic food market in India and abroad. The acquisition brings with it a vast product portfolio, a strong farmer network, and international reach, positioning ITC as a formidable player in the organic foods segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Navigating the New FDI Landscape: ITC's Strategic Advantage
Market News, Markets - April 15, 2025

Navigating the New FDI Landscape: ITC's Strategic Advantage

Navigating the New FDI Landscape: ITC’s Strategic Advantage

 

 

Recent clarification in the FDI policy permits companies in restricted sectors to allot bonus shares to foreign investors, enhancing market confidence for firms such as ITC.

Government Revises FDI Rules for Prohibited Sectors

In a move aimed at offering greater flexibility to companies operating in sectors where Foreign Direct Investment (FDI) is restricted, the Indian government has eased regulations allowing bonus shares to be issued to existing foreign shareholders. This step is expected to benefit entities like ITC Ltd, where British American Tobacco (BAT) holds a significant stake.
The Department for Promotion of Industry and Internal Trade (DPIIT) recently issued a clarification that allows companies in FDI-prohibited industries to issue bonus shares to their foreign stakeholders, provided that such actions do not lead to an increase in the foreign investors’ ownership percentage.

How ITC Could Benefit

ITC Ltd, a major player in India’s tobacco sector, falls under the category of businesses where FDI is not permitted. British American Tobacco (BAT), a prominent international tobacco corporation based in the United Kingdom, holds a 25.5% stake in ITC. With the latest clarification, BAT is now eligible to receive bonus shares from ITC without exceeding the current equity limit, offering ITC greater flexibility in managing capital distribution.
This policy shift may come as a relief to companies with legacy FDI that predates the imposition of sectoral restrictions. ITC, in particular, may find this an efficient way to manage reserves and enhance shareholder value without triggering regulatory concerns.

Legal Perspective on the Clarification

Legal experts are viewing the development as a positive shift in policy interpretation. Vaibhav Kakkar, a senior partner at Saraf and Partners, commented, “The clarification is based on the rationale that issuing bonus shares doesn’t involve any fresh capital inflow. It allows Indian firms to convert their accumulated reserves into equity, benefiting both Indian and foreign shareholders.”
The relaxation essentially enables capital restructuring in a compliant manner, while respecting the existing FDI caps. This facilitates a more balanced shareholder rights framework for companies that had historically attracted foreign investment under now-prohibited categories.

Clarification from DPIIT

According to DPIIT, “An Indian company operating in a sector where FDI is barred is allowed to issue bonus shares to its current foreign shareholders, provided that the foreign ownership percentage remains unchanged following the issuance.”
This measure aligns with the government’s aim to simplify procedures for businesses and eliminate unnecessary regulatory bottlenecks. The clarification ensures that companies with non-resident investors, who were lawfully inducted before regulatory restrictions came into effect, can still maintain equitable shareholder practices.

Sectors That Remain Off-Limits

Although the rules on bonus shares have been relaxed, foreign direct investment continues to be entirely restricted in certain industries. These include:
• Tobacco and related products
• Lottery businesses
• Gambling and betting (including casinos)
• Chit funds
• Real estate activities and farm house construction
• Atomic energy
• Railway operations
FDI is either permitted automatically or with government clearance in every other sector.

Past Approval Process and Bottlenecks

Until now, any move to issue bonus shares in prohibited sectors—even for companies with grandfathered foreign investments—required prior consent from regulatory bodies like the Reserve Bank of India (RBI). This often resulted in lengthy procedural delays.
A notable example was seen in the case of Godfrey Phillips India Limited, where the process of obtaining necessary approvals proved to be time-consuming. This new policy shift will cut down on such bureaucratic delays and improve operational efficiency.
Rudra Kumar Pandey, a partner at Shardul Amarchand Mangaldas & Co., highlighted the importance of this change: “This development will significantly streamline corporate actions for companies operating in sectors with FDI restrictions. It helps in maintaining parity in shareholder rights and boosts investor confidence.”

Final Thoughts

The government’s decision to permit bonus share issuance in FDI-prohibited sectors without altering foreign ownership levels is a significant regulatory improvement. This is particularly impactful for companies like ITC, where foreign ownership already exists within the allowed limit.
By acknowledging that bonus shares do not involve additional capital inflows, the clarification enables better capital management and equity distribution. It also marks a thoughtful step towards harmonizing investor rights while still upholding sector-specific restrictions.
This policy refinement, while seemingly technical, could enhance investor sentiment and provide a template for balanced FDI governance going forward.

 

 

 

 

 

 

 

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