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Why is Tata paying ₹7,000cr for a brand that just made ₹100cr in profits in 2020?

Why is Tata paying ₹7,000cr for a brand that just made ₹100cr in profits in 2020?

Does Tata ‘need’ Bisleri?
Why is Bisleri on sale?

Let’s answer these questions today's blog

Bisleri, a brand synonymous with ‘packaged drinking water’ is on sale today!

In 1969, Ramesh Chauhan (owner of Parle) bought Bisleri from an Italian company for ₹4 lakhs.

Chauhan is the same businessman who successfully sold brands like Thums Up & Maaza to Coca Cola in 1993.


Since 1969, Bisleri has expanded its business, distribution network, grew bigger & became synonymous with water in India.

Today, it has achieved a 400% growth & captured 40% of the water bottle market.

And yes, Bisleri is expected to generate a ₹2,500cr this year!


Bisleri uses the 4Ps of marketing!

Product - Bisleri has a product for every purpose, be it a wedding, for office, for gatherings or for domestic purpose.

Pricing - Bisleri practised an area-specific pricing policy. Bisleri is available cheaper at stations than at airports.

Place - Earlier, transporters would not transport bottles because of its low price & heavy weight. 

Hence, Bisleri started buying trucks & today, owns 5,000 trucks.

People - Earlier, Bisleri was only available to the elite class, but today, every common man can buy it

We all know how successful a brand Bisleri is, but why does a conglomerate like Tata care?

Look, Tata Consumers is a leader in the FMCG sector with its products like Tata Salt, Tata Tea & Tetley.

But, it struggles to achieve a respectable position in the packaged water biz.

Tata owns 2 water bottle brands - Himalayan & Tata Copper - the first one is available for ₹50 a litre and the second one for ₹20.

Despite being a Tata brand, none of the two have a good recall and are available just across 52 cities in India.


Now, Bisleri has 150 manufacturing plants, 4,000 distributors and over 5,000 trucks in India.

This deal will give Tatas, a readymade distribution network to reach every corner of India.

If the deal goes through, Bisleri could contribute to 14% of TCPL’s FY23 profits

Why is Bisleri on sale?

The 82 year old chairman of Bisleri, Ramesh Chauhan, is looking to sell Bisleri because of no potential successor.

His daughter is not interested in the business.
His health too, has not been great lately

Do you think Bisler is a great buy for Tata? Or is it overvaluing Bisleri at ₹7,000cr?

Let me know your thoughts!



Sources:
https://wap.business-standard.com/podcast/companies/why-is-the-tata-group-thirsting-for-bisleri-122112800040_1.html


https://www.hindustantimes.com/business/why-does-bisleri-want-it-to-be-sold-to-tata-group-its-chairman-explains-101669271704842.html


https://www.businesstoday.in/markets/stocks/story/bisleri-can-lift-tata-consumers-top-and-bottom-lines-by-18-says-nuvama-354167-2022-11-25.

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