ITC approves Sproutlife merger after taking full control

ITC Limited approved the amalgamation of Sproutlife Foods Private Limited on November 2, 2026, after Sproutlife became its wholly owned subsidiary on September 28, 2026; the earlier change to subsidiary status produced a Rs 405.88 crore fair-value remeasurement gain in the June quarter.

When did ITC take full control of Sproutlife?

ITC took full control of Sproutlife on September 28, 2026, when it acquired an additional 13,445 equity shares of rupees 10 each and made Sproutlife a wholly owned subsidiary. The filing does not state the consideration paid for those shares, the percentage held before that transaction, or a valuation for Sproutlife.

The ownership process began earlier on April 1, 2026, when Sproutlife became an ITC subsidiary because ITC acquired the right to nominate a majority of directors to Sproutlife’s board. The group’s financial results began including Sproutlife from April 1 even though ITC did not become the sole owner until September 28.

ITC’s board approved the scheme of amalgamation on November 2, 2026, under Sections 230 and 232 of the Companies Act, 2013. The approval is conditional on necessary approvals, so the filing identifies a board decision rather than confirming that the legal merger has already been completed.

What did ITC approve for Sproutlife’s merger?

ITC approved a scheme to amalgamate Sproutlife with ITC, subject to necessary approvals, after making Sproutlife a wholly owned subsidiary. The announcement does not provide a planned effective date, share-exchange ratio, consideration, or expected cost savings from the proposed amalgamation.

The proposed legal combination follows two accounting milestones in the six months ended September 30, 2026. Sproutlife’s assets and liabilities were provisionally determined under Indian Accounting Standard 103, or Ind AS 103, which governs business combinations, and were recorded within the FMCG-Others segment.

ITC stated that the group’s results and FMCG-Others results include Sproutlife from April 1, 2026. Therefore, its September quarter and six-month figures are not comparable with earlier periods, according to the company, because those earlier figures did not include Sproutlife over an equivalent period.

The filing identifies FMCG-Others as the segment containing branded packaged foods, education and stationery, personal care, safety matches and agarbattis. It does not separately disclose Sproutlife’s revenue, profit, assets, liabilities, brands, or contribution to the FMCG-Others segment for the September 2026 quarter or half year.

How did the Sproutlife accounting affect ITC’s results?

ITC recorded a Rs 405.88 crore gain in the quarter ended June 30, 2026 from remeasuring its existing Sproutlife interest at fair value under Ind AS 103. This gain was reported as an exceptional item and was the principal component of Rs 380.22 crore in net exceptional income for the six months ended September 30, 2026.

The half-year exceptional total reflects both the Sproutlife gain and Rs 25.66 crore of expenses incurred during the September quarter in relation to ITC’s acquisition of Century Pulp and Paper. That pulp-and-paper business was acquired on August 1, 2026, making it a separate transaction that also affects period comparability in the Paperboards, Paper & Packaging segment.

ITC’s consolidated profit before tax was Rs 11,555.47 crore in the six months ended September 30, 2026, compared with Rs 14,106.69 crore a year earlier. Profit for the period was Rs 8,738.12 crore, down from Rs 10,529.96 crore, while the exceptional-item comparison also includes a Rs 88.08 crore insurance-claim settlement in the prior-year half.

In the September quarter alone, ITC reported Rs 25.66 crore of exceptional expenses, whereas the Rs 405.88 crore Sproutlife gain fell in the preceding June quarter. Consolidated profit for the September quarter was Rs 4,229.33 crore, compared with Rs 5,186.55 crore in the corresponding quarter of 2025 and Rs 4,508.79 crore in the preceding quarter.

What does Sproutlife mean for ITC’s FMCG-Others reporting?

ITC’s FMCG-Others segment reported revenue of Rs 7,218.36 crore for the quarter ended September 30, 2026, compared with Rs 6,059.12 crore a year earlier and Rs 6,687.90 crore in the preceding quarter. Its segment result was Rs 576.69 crore, versus Rs 438.72 crore in the year-earlier quarter and Rs 484.97 crore in the June 2026 quarter.

Those changes cannot be read as an organic Sproutlife contribution because ITC specifically says the current quarter and six-month FMCG-Others results are not comparable with previous periods. The segment also continues to carry significant business-development, brand-building and gestation costs for branded packaged foods and personal-care products under other expenses.

For the six months ended September 30, 2026, FMCG-Others revenue was Rs 13,906.26 crore, up from Rs 11,859.56 crore in the corresponding 2025 period. Segment result rose to Rs 1,061.66 crore from Rs 837.75 crore, but the disclosed April 1 consolidation date means the reported increase combines the segment’s underlying business with the inclusion of Sproutlife.

ITC’s consolidated revenue from operations reached Rs 60,101.70 crore in the September half, compared with Rs 44,385.21 crore a year earlier. The company cautioned separately that increased goods and services tax, or GST, and central excise duty on cigarettes from February 1, 2026 make gross revenue and excise-duty comparisons with earlier periods not strictly comparable.

Conclusion

ITC has moved Sproutlife from a subsidiary relationship beginning April 1, 2026 to full ownership on September 28, followed by board approval for an amalgamation on November 2. The sequence also created a Rs 405.88 crore June-quarter accounting gain, while Sproutlife’s inclusion within FMCG-Others limits direct comparisons with prior periods.

The next disclosed milestone is receipt of the necessary approvals for the scheme under Sections 230 and 232 of the Companies Act, 2013. Investors can also watch future FMCG-Others disclosures for post-amalgamation reporting, although ITC’s September filing does not set out a completion date or separately quantify Sproutlife’s sales or profit.