ITC To Increase Stake To 100% In Mother Sparsh 

FMCG major ITC will be acquiring an additional 73.5% stake in Mother Sparsh Baby Care, making the D2C natural baby care brand its wholly-owned subsidiary.

The acquisition will be completed over 2–3 years and the Mother Sparsh team, including its founder and chief executive Himanshu Y Gandhi will continue to operate the business during this period.

To begin with, ITC will raise its stake to 49.3% from the current 26.5% by infusing INR 81 Cr in the startup. The investment will be executed in two tranches through a mix of primary and secondary share purchases by Q1 FY27.

This brings ITC’s total investment in Mother Sparsh to around INR 126 Cr. 

In 2021, ITC picked up an initial 16% stake in the brand for INR 20 CR, later increasing it to 22% via an additional INR 13 Cr investment. 

Founded in February 2016 by Himanshu Gandhi and Rishu Gandhi, Mother Sparsh is an ayurvedic and natural baby and mother care brand, claiming to have achieved an annual revenue run rate of over INR 110 Cr.

The deal aligns with ITC’s strategy, which focuses on building a portfolio of consumer-centric, purpose-led brands, especially in high-growth and digital-first segments. 

Gandhi said, “We are delighted that ITC, who came on board as an early investor, is now taking Mother Sparsh to the next level. We’re confident that ITC’s institutional strengths will help serve the evolving needs of Indian mothers for generations to come.”

While its latest financials (Q4 FY25) are yet to be out, ITC’s Q3 FY25 result showed that the company is standing at a revenue of INR 20,350 Cr which has grown 8% on a year on year basis. Its net profit for the quarter also narrowed 7% YoY to INR 4,935 Cr.

ITC’s buyout of Mother Sparsh will be another instance of conglomerates making inorganic expansion via acquisitions. Notably, ITC also acquired 100% stake in D2C meat delivery startup Meatigo’s parent to expand its product portfolio.

Earlier this year, another FMCG giant Hindustan Unilever signed an agreement to acquire D2C brand Minimalist at INR 2,670 Cr. 

Other notable examples include Aditya Birla Fashion and Retail’s acquisition of controlling stakes in digital-first brands like Bewakoof and Urbano. 

This increasing interest from conglomerates along with several other factors have resulted in a revival in mergers and acquisitions (M&As) in Q1 2025.  Notably, A total of 26 M&A deals materialise during this quarter, up 73% from 15 such deals in Q1 2024 and 120% from 12 M&As in Q4 2024.