Reliance Industries is once again looking to expand its consumer products portfolio and is in talks to acquire a majority stake in Chennai based Udhaiyam Agro Foods.
The discussions are being led by Reliance’s consumer products arm, which was recently separated from Reliance Retail to operate as a direct subsidiary of Reliance Industries. The unit has been actively scouting smaller and established regional brands as part of its strategy to strengthen its presence in packaged consumer products.
According to a media report, Reliance is in advanced talks with Udhaiyam Agro Foods, a staples and ready-to-cook mixes maker based in Chennai. Udhaiyam was incorporated in July this year as an unlisted arm of Shri Lakshmi Agro Foods Pvt Ltd, a company founded in 2002.
Udhaiyam Agro Foods has 2 directors, Selvaraj Sudhakar and Selvaraj Dhinakar, who are also the founders of Shri Lakshmi Agro Foods Pvt Ltd. As per available data, the company reported revenue of Rs 668 crore as of March 31, 2024.
Sources cited in the report said the proposed transaction is expected to be a mid sized deal and follows company’s earlier acquisition strategy of entering regional markets before scaling brands nationally. If the deal goes through, the promoters of Udhaiyam are expected to retain minority stakes in the business.
Udhaiyam currently has a strong regional footprint and competes with established players such as Tata Consumer Products, iD Fresh Food, and MTR in the staples and ready-to-cook segments.
The talks come shortly after Reliance Retail transferred its FMCG operations into New Reliance Consumer Products, a newly formed direct subsidiary of Reliance Industries. The restructuring was aimed at sharpening focus on packaged consumer products.
New Reliance Consumer Products manages a wide portfolio that includes beverages such as Campa, Sure Water, and Spinner sports drinks, food brands like Sil Jam, Lotus Chocolate, and Alan’s Bugles chips, as well as Velvette personal care and Tira Beauty.
Earlier this month, Reliance informed stock exchanges that it had wound up Reliance Consumer Products and created New Reliance Consumer Products under a composite scheme of arrangement effective December 1. Separately, Reliance Consumer announced a Rs 40,000 crore agreement with the government to set up food manufacturing units across India. The Mukesh Ambani backed company reported revenue of over Rs 11,000 crore in FY25.
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