Reliance Consumer Products is pushing ahead with talks to snap up a majority stake in Chennai-based Udhaiyams Agro Foods, a packaged foods player pulling in Rs 668 crore in revenue from staples, snacks, and ready-to-cook breakfast mixes. The deal fits Reliance’s playbook of grabbing strong regional brands and scaling them nationwide, much like its buys of Campa Cola and Velvette shampoos. Promoters S Sudhakar and S Dinakar plan to hang onto minority shares if the transaction closes.
Although the precise size of the check has not yet been disclosed, insiders describe it as mid-sized, with a maximum value of hundreds of crores. In South Indian marketplaces, Udhaiyams, a private company that separated from parent company Shri Lakshmi Agro Foods in July, competes with Tata Consumer Products, iD Fresh Food, and MTR. Reliance sees it as a way to gain traction in the cutthroat ready-to-eat market.The date coincides with the customer upheaval at Reliance. Reliance Consumer Products was shut down under Reliance Retail a few weeks ago, and on December 1st, New RCPL was born as a direct subsidiary of Reliance Industries. In FY25, New RCPL generated over Rs 11,000 crore in revenue and signed a Rs 40,000 crore agreement with the government for food production facilities throughout states.
Udhaiyams Brings Snacks and Breakfast Mixes to Table:
In addition to necessities like rice and flour, Udhaiyams offers snacks and quick breakfast options, such as the idli and dosa mixes that are so popular in the South. The founding directors, Sudhakar and Dinakar, developed it into a Rs 668 crore business that is robust in local markets yet ready for greater expansion. Reliance’s strategy is to take advantage of its extensive retail network for a nationwide push, building on previous successes.
According to those close to the conversation, the plan is similar to previous acquisitions: begin locally and expand throughout India through JioMart, Reliance Retail locations, and wholesale channels. Control to direct growth without a large initial investment. While Reliance manages growth, the presence of promoters ensures continuity in operations.This fits into Mukesh Ambani’s FMCG ramp-up at Reliance. The new RCPL places a strong emphasis on packaged goods, including beverages and personal hygiene products, with a particular focus on food. The government’s partnership with factories implies billions of dollars in capital expenditures to produce acquired brands and private labels in large quantities.
Reliance FMCG’s Battle Against Tata and iD Fresh Heats Up:
The consumer shift at Reliance Retail began years ago but has recently accelerated. Coke and Pepsi were overtaken by Campa Cola’s comeback, while Velvette shampoos challenged Unilever’s dominance. Udhaiyams would boost breakfast and staples, take aim at iD Fresh’s doughs and MTR’s ready-mixes, as well as Tata’s local specialties.
The creation of the new RCPL improves operations and fundraising, placing it directly under Reliance Industries. Although FY25 revenue exceeded Rs 11,000 crore, foods trailed household goods and beverages. Instead of starting from scratch, this venture takes advantage of established supply systems and recipes.Udhaiyams benefit from South India’s dominance because Reliance outlets there can experiment, make adjustments, and then go north. With earn-outs linked to growth milestones, promoters’ minority stake keeps them in the game.
Food Pact and Restructuring Fuel Acquisition Drive:
Reliance’s Rs 40,000 crore food Memorandum of Understanding with the government aims to build large units for processing, packaging, and possibly even exports. When combined with Udhaiyams’ expertise, New RCPL quickly achieves vertical integration, mills and mixes all under one roof.Although the deal structure is kept under wraps, the mid-sized tag indicates a ballpark value of Rs 300–500 crore, valuing Udhaiyams at 0.5–1x sales, which is usual for regional FMCG. A clear balance sheet and no debt overhang add sweetness to the situation.
Amidst the urban hustle, competition intensifies as Tata, HUL, and ITC pursue packaged convenience. With more than 18,000 shops, Reliance’s retail power makes acquired brands instantly accessible, making competitors jealous. If signed, Udhaiyams becomes part of a stable with long-term goals of Rs 1 lakh crore in FMCG sales.Promoter agreements and antitrust approvals are required before talks may conclude. As usual, Reliance remains silent, allowing leaks to create excitement. This wager highlights Ambani’s battle over food-from regional origins to national supremacy.
