Reliance Industries — through its fast-expanding consumer products arm — is in advanced talks to acquire a majority stake in Udhaiyam Agro Foods, a Chennai-based packaged food maker, signalling its growing ambitions in the FMCG (Fast-Moving Consumer Goods) sector. The Economic Times
The potential deal, which sources say is mid-sized and in line with Reliance’s strategy of buying regional food brands before scaling them nationally, could be worth hundreds of crores and would intensify competition with major FMCG players. The Economic Times
📌 What’s Happening: Details of the Talks
Reliance’s consumer products division — now operating under New Reliance Consumer Products Ltd (New RCPL) after a recent restructuring — is negotiating to buy a majority stake in Udhaiyam Agro Foods, which is valued at around ₹668 crore.
The discussions are described as advanced, though the exact terms and final deal size have not been formally disclosed. The promoters of Udhaiyam are expected to retain a minority shareholding.
Udhaiyam produces staples, snacks, and ready-to-cook breakfast mixes, and competes in regional markets against firms like Tata Consumer Products, iD Fresh Food, and MTR Foods.
🍽️ Why the Acquisition Matters
This move forms part of Reliance’s broader strategy to strengthen its presence in the packaged food and grocery space — one of the fastest-growing segments within India’s consumer goods market:
- Expanding FMCG Footprint: Reliance has previously acquired brands such as Campa soft drinks and Velvette shampoos, and is now looking toward regional food brands to build scale.
- Targeting Growth Markets: Udhaiyam’s strong foothold in southern India gives Reliance an opportunity to boost shelf presence and compete with established legacy players.
- Part of Packaged Foods Push: The potential deal aligns with India’s growing packaged food demand, driven by urbanisation and changing consumer preferences.
If completed, the acquisition would reinforce Reliance’s strategy of combining regional brand strength with national distribution networks — particularly leveraging its retail ecosystem.
🏭 About Reliance’s Consumer Products Strategy
Reliance has been restructuring its consumer business, integrating its FMCG portfolio under the newly formed New RCPL, a direct subsidiary of Reliance Industries. This shift aims to sharpen focus on packaged consumer products and accelerate growth in food, beverages, and personal care categories.
Alongside acquisitions, Reliance has also announced large-scale food manufacturing initiatives, including a ₹40,000-crore memorandum of understanding (MoU) with the Indian government to set up food processing units across the country.
📊 Market and Competitive Impact
The deal — if finalised — could reshape competition in India’s FMCG sector:
- Regional to National Scale: Buying Udhaiyam’s regional strength can help Reliance move quickly into categories where legacy players dominate.
- Competing with Leaders: Brands like Tata Consumer Products, MTR Foods, and iD Fresh Food are established names; Reliance’s entry could intensify competitive pressure.
- Growth Within FMCG M&A: It reflects a broader trend of consolidation in India’s FMCG market, where large corporations are snapping up regional brands to expand portfolio and market reach.
🧠 What’s Next?
Negotiations are ongoing, and formal announcements from either Reliance or Udhaiyam Agro Foods have not yet been made. Industry watchers will be looking for a definitive agreement, expected to be revealed once terms are finalised and regulatory approvals, if required, are secured. The Economic Times
