Tata Consumer Products Limited (TATACONSUM)

Yes, arbitrage opportunity is there but the benefit will depend on the duration it takes for the process to complete.
I was thinking of selling some Tata consumer and buying Tata coffee, but tax implications and brokerage and stt fees will reduce the returns.
If anyone has any experience regarding this than please comment.

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I am very bad at this - but if Tata coffee was at around 200 and Tata Consumer at around 740 when the merger ratio of 10:3 was announced…say I have limited capital of 2000 rs…I can buy 10 Tata coffee shares and 2.7 Tata Consumer share at market price…however, because of the merger ratio, I can get 3 Tata consumer share by virtue of 10 Tata Coffee share …

Now, how this news makes both share prices react is what I dont know…market can pump up Tata Coffee shares to fill that gap or can keep Tata Coffee as it is and pull down Tata Consumer shares instead…resulting in 0 arbitrage…

So honestly, no clue if this can ever be played in any share with certainty…

Regarding business benefits…I see that apart from the branded Coffee and coffee plantation business synergies…the Starbucks partnership will also be streamlined as they were , please correct me if wrong, in partnership with Tata Coffee for supply of raw Coffee for their global operations and that business now comes directly under Tata Consumer and this partnership can be further streamlined…

Although I have no clue what holds ahead for Tata Starbucks partnership…

Disc: Invested, biased. Above views only for academic purposes and no buy/sell recommendation

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From the company site

For Demerger - TCPL issues 1 equity share for every 22 equity shares of TCL (to TCL’s

public shareholders)
@ For Merger - TCPL issues 14 equity shares for every 55 equity shares of TCL (to TCL’s
public shareholders)
Both the above are proposed to be simultaneous
prices can change. At todays rates
TCL 55 x 223/share = 12265
TCPL 14 x 816/share = 11424 (excluding brokerage etc)

So the prices seem to have already been factored in since announcement
I’m not wonderful at this either, just thought I would share

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no FMCG company is into selling branded dry fruits which i think is a high margin, even if commoditized,business

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Results have met expectations of most analysts. To me, the biggest take away this result was significant increase in dividend (50% increase) from 4 last year to around 6 this year. Add to that, this increase was on a high base last year (48% increase last year from 2.7 to around 4).

Even after this stupendous 50% YoY increase in dividend for last 2 years, the stock trades at 0.7% div yield as on today…now is that a good thing or bad, I dont know…

It seems this increase in dividend was driven more on the increase in payout (I maybe wrong and more insights on this welcome via comparison with peers)…but real increase should come when the super growth phase normalizes over next decade or so…

Disc: Invested, biased. Not a buy/sell recommendation. Post only for academic purposes

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TCPL taking one giant step at a time.

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Video on above ET Article

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image

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Himalayan, a well-known water brand, enjoys significant equity among consumers because it is natural mineral water bottled directly from the source in the foothills of the Himalayas with strong sustainability credentials, the company said.
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“In line with the brand credentials, both these new product offerings are being sourced from the Himalayan belt,” the Tata group’s FMCG arm said in a statement.

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Honey is a real big market, few days back we saw a Tweet from Piyush Goyal showcasing the Export growth of India’s natural Honey. India’s natural honey exports register a spectacular growth of 149% in April-May 2022 over April-May 2013.

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The Central Board of Indirect Taxes and Customs on Sunday said single packages of food items like cereals, pulses and flour weighing up to 25 kg will be considered as ‘prepackaged and labelled’, and liable to five per cent GST from July 18.
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It also clarified that if a retail shopkeeper supplies in loose quantity the item bought from a manufacturer or a distributor in a 25-kg pack, such sale to consumers will not attract GST.

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Looks like this is going to impact Private labels more as they are already lowest prices and last few years came up with packaging in some retail chains which earlier used to sell bulk as loose…
Disc: Invested hence biased. Not eligible for any recommendations

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Sunil D’souza of Tata Consumer on becoming a full-fledged FMCG company

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