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Saudi Agriculture and Livestock Investment Company (SALIC) will be investing Rs 455.5 crore for a 9.22 percent stake in LT Foods, the owner of Daawat brand basmati rice.

Speaking to CNBC-TV18 after the stake sale deal, Ashwani Kumar Arora, MD and CEO of LT Foods, said there is no intention of any more promoter selling. The plan is to have a majority stake in the company.

“We are very excited about this deal. This will deal will open the doors for the Middle East market, which is a comparatively weaker market for LT Foods. So, this will be for the both organic and inorganic opportunity that we will explore,” he said.

Besides this transaction, LT Foods will purchase SALIC's 29.52 percent equity stake in subsidiary, Daawat Foods, for Rs 175.8 crore, making it a fully-owned subsidiary.

SALIC had invested in Daawat Foods in 2020.\Saudi Arabia is a one-million-tonne market and LT Foods’ capacity is around 20,000 tonnes. The company expects to have a market share in the range of 5-6 percent in the coming year.

LT Foods has also entered into a strategic supply agreement with SALIC for product supply for 10 years.

Also Read: Government could implement measures to cool record wheat prices

Talking further about the deal, Arora said, “This money will be used for the growth of the company; immediately it will reduce some borrowing, but in the long run it will be used for growth.”

LT Foods ended marginally down on the BSE today, November 11.

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(Edited by : Shoma Bhattacharjee)

First Published:Nov 11, 2022 5:39 PM IST