ITC Limited approves Sproutlife merger without new shares

ITC Limited approved the amalgamation of wholly owned subsidiary Sproutlife Foods Private Limited on 2 November 2026, with Sproutlife’s FY 2025-26 turnover of Rs 451.71 crore set to move into ITC without any fresh ITC shares being issued. The scheme is proposed to take effect from 1 April 2026, subject to necessary approvals.

What did ITC approve for Sproutlife?

ITC approved a Scheme of Amalgamation under Sections 230 and 232 of the Companies Act, 2013, through which Sproutlife will merge into ITC. The ITC board approved the proposal at its 2 November 2026 meeting, which began at 2.45 p.m. and concluded at 6.05 p.m., according to the company’s stock-exchange disclosure.

The scheme has a proposed effective date of 1 April 2026, although it remains subject to necessary approvals. Once effective, all of Sproutlife’s assets, liabilities, rights, obligations and employees will transfer to ITC. The filing identifies Sproutlife as the transferor company and ITC as the transferee company, moving the health-food operations directly into the listed parent.

How large is Sproutlife compared with ITC?

Sproutlife reported FY 2025-26 standalone turnover of Rs 451.71 crore, total assets of Rs 150.07 crore and net worth of Rs 5.22 crore. In the same period, ITC reported audited standalone turnover of Rs 80,867.49 crore, total assets of Rs 88,915.86 crore and net worth of Rs 68,434.16 crore.

The proposed change is the direct integration into ITC of a business with Rs 451.71 crore of FY 2025-26 turnover. Sproutlife manufactures and sells bars, muesli, oats, protein-rich foods and peanut butter for health-conscious consumers under the digital-first Yoga Bar brand, while ITC’s disclosed operations include fast-moving consumer goods and agri business.

Why is ITC merging Sproutlife into the parent?

ITC said the amalgamation is intended to enable seamless integration of both companies’ operations and realise synergies across the combined business. Management cited the potential to unlock the full potential of the combined operations and maximise value-creation opportunities, but did not disclose a cost-saving target, synergy amount or separate financial timetable beyond the proposed 1 April 2026 effective date.

ITC also said the scheme would support optimal deployment of financial, managerial and operational resources through a shared talent pool and common resources. The company further cited more efficient capital allocation through consolidation and optimisation of the two companies’ cash flows and financial resources. These are management’s stated expected benefits for the Yoga Bar business, not quantified outcomes in the 2 November 2026 filing.

Will the Sproutlife merger change ITC shareholding?

No, ITC said its shareholding pattern will not change following the amalgamation. Since Sproutlife is wholly owned by ITC, all Sproutlife equity shares held by ITC and its nominees will be cancelled and extinguished when the scheme becomes effective, and ITC will not issue fresh shares.

The transaction is a related-party transaction because Sproutlife is an ITC wholly owned subsidiary. ITC said the transfer of Sproutlife’s assets, liabilities, rights, obligations and employees will occur at arm’s length as part of the scheme. The filing specifies neither cash consideration nor a share-exchange ratio, consistent with the cancellation of shares already held by ITC and its nominees.

What will transfer from Sproutlife to ITC?

All of Sproutlife’s assets, liabilities, rights, obligations and employees will transfer to ITC when the amalgamation becomes effective. The operations include the Yoga Bar product range of bars, muesli, oats, protein-rich foods and peanut butter, and Sproutlife reported a FY 2025-26 asset base of Rs 150.07 crore.

The filing does not state whether ITC will retain Sproutlife as a separate operating name after the proposed 1 April 2026 effective date. It also does not provide Yoga Bar brand-level revenue or profit figures. The disclosure establishes that ITC will directly hold the operations currently housed in Sproutlife, while ITC’s shareholding pattern remains unchanged.

Conclusion

The proposed amalgamation brings Sproutlife’s Rs 451.71 crore FY 2025-26 turnover and Rs 150.07 crore asset base into ITC without a new share issue or a change in ITC’s shareholding pattern. It also transfers the Yoga Bar business, employees, liabilities, rights and obligations into ITC’s existing fast-moving consumer goods and agri-business platform.

The next disclosed milestone is the scheme’s proposed effective date of 1 April 2026, subject to necessary approvals. Investors can watch for confirmation that approvals have been obtained and for later ITC disclosures on integration of the Yoga Bar products, shared resources and Sproutlife’s financial operations.