In a bid to bolster its foothold in India’s escalating frozen foods market, ITC Limited announced the acquisition of Prasuma – a reputable player in the frozen, chilled, and ready-to-cook segments. The acquisition will be carried out in a phased manner over three years beginning with ITC acquiring a 43.8 percent stake, culminating with full ownership by June 2028.
With this deal, ITC has positioned itself as one of the strategic players in the frozen food premium segment, which has a current market size of over Rs. 10,000 crore and still growing. It is considered one of the larger brands in the frozen food industry because of its flagship line, the Prasuma Momos, which was released in 2019, and has over 170 products in their diverse portfolio.
Prasuma’s Market Presence and Portfolio
Operating under three distinct brands – Prasuma, Meatigo by Prasuma, and Prasuma Momo Kitchen – the company has built a strong presence across more than 100 cities in India. Its product range spans various categories, including:
- Frozen momos (where it holds a leading market position)
- Baos
- Korean Fried Chicken
- Schezwan Momo meals
- Premium delicatessen products
- Raw meats
The company’s recent performance has been noteworthy, with an annual revenue run rate of Rs. 200 crore based on the last three months’ performance. Through its direct-to-consumer platform Meatigo, Prasuma has also established a strong digital presence in the premium meats and delicatessen segment.
Financial Performance and Strategic Fit of ITC
The acquisition announcement comes alongside ITC’s recent financial results for Q3FY25, which showed mixed performance across its business segments. The company reported:
- A 1% increase in standalone net profit to Rs. 5,638 crore
- Consolidated revenue growth to Rs. 20,350 crore from Rs. 18,880.4 crore year-on-year
- Strong performance in agriculture, hotels, and cigarettes businesses
- Modest growth in the FMCG sector due to subdued market conditions
The acquisition of Prasuma aligns with ITC’s strategy to expand its presence in the packaged foods segment and capitalize on the growing consumer preference for convenient, ready-to-cook options. The frozen foods market in India has seen significant growth in recent years, driven by changing consumer lifestyles, increasing urbanization, and growing demand for convenient meal solutions.
Future Implications
The phased acquisition structure, with complete ownership targeted by June 2028, suggests a careful integration approach that allows both companies to leverage their respective strengths. For ITC, this acquisition represents an opportunity to:
- Expand its presence in the premium frozen foods segment
- Leverage Prasuma’s established distribution network
- Access new customer segments through Prasuma’s direct-to-consumer platform
- Enhance its product portfolio with premium offerings
The deal also indicates that the company is strengthening its FMCG business despite current market challenges. ITC has also announced an interim dividend of Rs. 6.5 per equity share, indicating continued focus on shareholder returns while pursuing strategic growth opportunities.
The acquisition will create synergies between ITC’s large distribution network and Prasuma’s innovative portfolio of products, hence accelerating growth in India’s frozen foods market. Since it has a history of evolution in consumer preferences and builds upon rising demand for convenient food solutions, this strategic move puts ITC in a better position to capture a larger share of this growing market segment.
