Hindustan Foods to Inject ₹100 Crore into Shoe Business Expansion

  • Nov. 17, 2023
Hindustan Foods to Inject ₹100 Crore into Shoe Business Expansion

Hindustan Foods Ltd, a leading fast-moving consumer goods (FMCG) company, is embarking on a significant venture into the sports shoe manufacturing sector with a substantial investment of ₹100 crore. The decision to diversify into sports shoe production follows a careful observation of the Indian government's initiatives aimed at promoting and supporting sports shoe manufacturing within the country.

Sameer Kothari, Managing Director of Hindustan Foods Limited, emphasized the company's strategic approach, stating, "We have been closely monitoring the steps taken by the Indian Government to encourage sports shoe manufacturing in India. We are convinced that the policies along with the growing customer demand will enable a robust manufacturing eco‐system and are trying to leverage our expertise and experience in contract manufacturing in being able to offer manufacturing solutions to Indian and global sports shoe brands."

As part of this bold move, the FMCG firm has entered into a share purchase agreement (SPA) to acquire a 100% stake in KNS Shoetech Private Limited. This acquisition includes KNS Shoetech's manufacturing facility situated in Kundli, Haryana, which currently produces an extensive portfolio of sports shoes and sneakers.

The strategic acquisition of KNS Shoetech aligns with Hindustan Foods' broader strategy to enter the domain of contract manufacturing and expand its business footprint into the sports shoe industry. Post-acquisition, KNS Shoetech is poised to become a wholly-owned subsidiary of Hindustan Foods Limited.

In outlining the significance of this move, the company stated, "The acquisition of the Shares of KNS Shoetech is in line with the Company’s strategy to enter into Contract Manufacturing and expansion of its business into Sports Shoes. This acquisition will kickstart HFL’s journey in this industry and Company is looking forward to strengthening its position in the future by additional capex and expansion."

Hindustan Foods Limited, established in 1984, has been a key player in providing shared manufacturing services to various FMCG corporates. The company's diversified presence spans sectors such as food and beverages, home care, fabric care, beauty and personal care, health care and wellness, leather and sports footwear, and household insecticides.

The move into sports shoe manufacturing is a strategic response to the evolving market trends, consumer demands, and the company's commitment to exploring new growth avenues. The acquisition of KNS Shoetech positions Hindustan Foods to actively participate in India's growing sports shoe market, tapping into the nation's increasing interest in fitness and athletic activities.

In the financial markets, Hindustan Foods Ltd's share price experienced a 1.86% decrease, closing at ₹528.85 apiece on the Bombay Stock Exchange (BSE). This adjustment is in line with the broader BSE Sensex, which recorded a decline of 1.26%, with Hindustan Foods' market capitalization standing at ₹5,962.40 crore. The company's trading activity on the BSE witnessed 19,481 shares changing hands, compared to the two-week average of 7,495 shares.