ITC hikes stake in D2C company Mother Sparsh to 22%

With the growing focus on the Direct to Consumer (D2C) space, cigarettes to hotel conglomerate ITC has increased its stake in baby care brand Mother Sparsh to 22% for Rs 13.5 crore. 

According to a regulatory filing by the company, “1000 Compulsorily Convertible Preference Shares of ₹10/- each of Mother Sparsh are proposed to be acquired,” said ITC. It further said that the “acquisition is in line with the company’s continued interest in the fast growing D2C space in the 'personal care' category.” 

ITC had acquired 16% stake in Mother Sparsh for Rs 20 crore in November 2021. Mother Sparsh has been operating in the premium ayurvedic and natural personal care segment, with a special focus on mother and baby care products. Mother Sparsh, founded in 2016, clocked a revenue of Rs 33.52 crore in FY22. 

ITC’s fund infusion is just part of a larger round of funding that Mother Sparsh is likely to close soon. The baby care company said that it is “in advanced discussions of securing Series B funding between Rs 90-100 crore shortly.” Mother Sparsh is likely to use these funds to expand its current portfolio, which contains products like unscented baby wipes, anti dandruff kits for kids, and plant powered baby care products to name a few. 

“Our recurrent funding aims to strengthen this mission through R&D in the space and offering one-of-its-kind solution for the needs of mothers and their little ones,” said Himanshu Gandhi, Co-founder and CEO, Mother Sparsh. A bulk of Mother Sparsh’s business comes from online channels at this point and it is likely that offline exposure will increase with ITC’s incremental investment in the brand.  

ITC’s increasing exposure in the D2C space is in line with the strategy set out by the company to accelerate digital transformation by developing digital-first FMCG brands. In April 2022, ITC picked up a 10% stake in Blupin Technologies, the parent company of Mylo, which operates in the new mom and baby space.  

ITC also has an online platform through which it sells its own brands in the food, personal care, cleaning and stationery space directly to consumers.