(Image Source: Business Today)
Reliance Industries is making another play in the packaged food space. The company is in advanced talks to acquire a majority stake in Udhaiyams Agro Foods, a Chennai-based maker of staples, snacks and ready-to-cook breakfast mixes. If the deal goes through, it would put Reliance directly against established regional players like Orkla’s MTR, iD Fresh Food and Tata Consumer Products.
Udhaiyams has an annual revenue of about Rs 668 crore and a strong foothold in South Indian markets. The promoters, S Sudhakar and S Dinakar, are expected to retain minority stakes after the deal closes. Both are founding directors of the company, which was incorporated just this July as an unlisted private entity under the parent company Shri Lakshmi Agro Foods.
No one at Reliance or Udhaiyams has made an official announcement. But multiple sources confirmed to financial outlets that serious discussions are happening. The deal, if it happens, will be mid-sized and follows Reliance’s playbook for acquisitions.
The Reliance Strategy
Reliance doesn’t usually build FMCG brands from scratch. Instead, it buys established regional brands like Campa soft drinks and Velvette shampoos. The playbook is simple: take a brand with strong regional presence, pour in capital, and expand it nationally using Reliance’s massive distribution and retail network.
This approach works because brand-building takes time and money. Buying an existing brand with customer loyalty cuts years off the clock. Reliance brings scale and distribution that small regional players can never match alone.
Udhaiyams fits this profile perfectly. It’s established in South India but unknown in the North. Its products compete with brands that have national presence. Adding Reliance’s resources could transform it into a pan-India player.
Timing and Structure
The acquisition talks come right after a major corporate restructuring at Reliance. The company spun off its FMCG business from Reliance Retail to create New Reliance Consumer Products, a direct subsidiary of Reliance Industries itself. That move signals seriousness about consumer products.
Under this new structure, Reliance Consumer reports directly to the holding company, not through the retail division. That gives it more autonomy and faster decision-making. It also means Mukesh Ambani is personally championing this consumer push.
The restructuring took effect December 1st. Within weeks, news of the Udhaiyams talks emerged. The timing suggests Reliance wants to build momentum in the consumer space.
What This Means Competitively
If Reliance succeeds, it will intensify competition in the ready-to-eat breakfast and staples segment. MTR dominates this space through Orkla. iD Fresh Food has built a strong base on fresh food supply. Tata Consumer Products competes across multiple categories.
Reliance adding a regional champion to its portfolio would give it serious scale in a growing segment. As Indian consumers increasingly look for convenience in breakfast and cooking, this space is attracting serious competitors.
The Bigger Picture
Reliance has committed Rs 40,000 crore with the government to set up food manufacturing facilities across India. That’s not just infrastructure. It’s a signal of intent to become a major force in packaged food.
The Udhaiyams acquisition would be one piece of that larger puzzle. Other pieces are its existing brands, new product launches and manufacturing expansion.
For Udhaiyams’ founders, this deal would validate their business and give them capital to expand. For Reliance, it’s another brick in the consumer empire it’s building. For consumers, it might mean better-quality products and wider distribution of regional brands they know and like.
