Frozen food feast: ITC bites into momo-maker Prasuma | Company Business News-OxBig News Network

New Delhi: ITC Ltd on Thursday signed definitive agreements to acquire frozen food and ready-to-cook foods brand Prasuma.

This acquisition will fortify the company’s presence in such future-facing categories, which the company said has a current annual market size of over ₹10,000 crore and is poised for rapid growth in the years ahead. 

In a filing to the stock exchanges, ITC said it will acquire 100% stake in Gurugram-headquartered Prasuma over a period of three years.

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The first tranche of 43.8% stake shall be acquired upfront for an initial investment of ₹131 crore through primary subscription and secondary purchases; this stake buy is expected to close in March 2025 subject to fulfilment of closing conditions.

The balance stake will be acquired in tranches by June 2028, based on pre-defined valuation criteria and subject to other conditions as stated in the definitive agreements.

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By April 2027, ITC’s stake in Prasuma will increase to 62.5% through secondary purchases of ₹56 crore to be made based on a pre-agreed pre-money valuation. The balance 37.5% equity stake is to be acquired in about three years on pre-agreed valuation criteria.

Prasuma’s team including chief executive officer Lisa Suwal and chief operating officer Siddhant Wangdi will continue to operate all functions of the business during the three-year period. ITC will be represented on the Board, per the investor presentation shared on the exchanges.

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Prasuma operates through ‘Prasuma’, ‘Meatigo by Prasuma’ and ‘Prasuma Momo Kitchen’ brands. The flagship ‘Prasuma Momos’ were launched in 2019.

With presence in 100+ cities across online and offline channels, Prasuma has scaled up to annual revenue run-rate of about ₹200 crore. ITC has a large foods portfolio spanning noodles, chips, spices, dairy and frozen foods.

ITC entered the frozen foods market in 2019 under the ‘ITC Master Chef’ brand, which is available across 200 towns.

“With the industry at an inflection point, this acquisition will help strengthen and expand ITC’s presence in the aforesaid categories by gaining entry into high growth segments, viz. pan asian foods, deli meats, etc.,” the company said in a statement Thursday.

“With the proposed acquisition, ITC will become the first full-stack player in the segment with an unparalleled portfolio, offering meals and snacking options across multiple occasions throughout the day for the discerning consumer. ITC Master Chef and Prasuma shall also benefit from significant synergies through well designed institutional mechanisms and enablers,” the company added.

To be sure, ITC has made a string of acquisitions post-pandemic as consumer preferences change.

In 2023, the company invested in Sproutlife Foods Pvt. Ltd (SFPL), a direct-to-consumer (D2C) company with a portfolio of new-age, digital-first brands under ‘Yoga Bar’. In 2020, the had company acquired Kolkata-based spice maker Sunrise Foods Pvt. Ltd (SFPL).