When ITC launched Aashirwaad atta there wasn’t any major brand…and atta didn’t hv any variants like in rice…so it was relatively easy for itc to build a brand in a relatively vacant space (shakti bhog, annapurna and pillsbury offered a very weak competition)…but ITC has not been able to do that in many other space e.g. juices…B Natural is having a tough time taking market share away from Real and Tropicana as these are well established and deeply entrenched brands esp in the minds of people…so ITC had to come up with a unique proposition which was ‘no use of concentrates’ and ‘unique flavours’ like Jamun, Kinnow, etc apart from usual ones like apple, etc and still it is struggling inspite of ITC’s huge cash power…therefore, building B Natural as a brand in juices has been a far more difficult journey than building Aashirwaad brand in atta. I would like to believe that in basmati rice ITC will face even bigger challenges than they are facing in juices…even though they will have the benefit of brand extn using already established brand equity of Aashirwaad but to make people connect with it will be far tougher than in non-basmati…I also feel ITC’s entry into basmati rice will make more investors see KRBL as an fmcg play much sooner than they wud hv seen without ITC…today no one can say Aashirwad atta is a commodity…it is a brand like colgate…so krbl is likely to be valued on same parameters as any other fmcg player with stability/visibility of cashflows…as more investors will be forced to study kbrl closely…and it is likely that no MF holding also will soon be a thing of past.
All the same, ITC is an institution in building fmcg brands and few can beat them in this game…but there have been smart players like Britannia who after ITC’s entry became smarter and did far better after ITC’s entry into biscuits…and the same could happen to KRBL…ITC’s threat could very likely regalvanise krbl mgmt into strengthening not just the brand but the overall business resulting in expanding the moat further.
ITC’s free money from cigarettes can literally kill businesses like eComm space is killing traditional retail…but its appears unlikely in basmati rice market due to the unique characteristics of basmati rice industry…also it took aashirwaad brand 13 yrs to cross 1k cr sales in a completely unorganised market…so over a much longer time ITC can replicate most of what krbl has achieved like build a brand, supply chain, warehousing, ageing of rice, hire experienced professionals, etc…but it will take a far bigger learning curve for them to replicate the 120 yrs of experience which krbl promoters have.
It appears to be a bad move by ITC…as they already have many struggling or nascent brands…it should concentrate more there than get into tougher categories…it seems to be suffering from the institutional imperative that affects most large diversified conglomerates…and from an investors standpoint it appears to be going from a concentrated to a confused mindset…
Rgds
RR
Invested in both, much more in ITC 
and constantly re-evaluating