According to sources, Tata Group is thought to have started negotiations with Bisleri International to buy a stake in the packaged water company.
Based on a source familiar with the situation, the situation is still very early on, so it would be premature to predict that a deal would materialise.
The Tata Group houses its consumer business under Tata Consumer Products Ltd. which also sells packaged mineral water under the brand Himalayan and with brands as Tata Copper Plus Water and Tata Gluco+ in the hydration segment.
The talks are understood to have been initiated by the Tata group FMCG arm TCPL.
However, both the companies declined to comment on the topic.
"Tata Consumer Products does not comment on market speculation," said a Tata Consumer Products spokesperson in an e-mailed reply.
A Bisleri International spokesperson also said it "does not comment on market speculation".
Industry watchers claim that, should the deal go through, it would give the FMCG arm of the Tata group a bigger opportunity to compete in the quickly expanding bottled water market.
According to a report from market research and advisory TechSci Research, the Indian bottled water market was estimated to be worth over USD 2.43 billion (roughly Rs 19,315 crore) in FY2021.
It is expected to grow at a CAGR of 13.25 per cent on account of increasing disposable income, rising health and hygiene awareness, and increasing product innovation, the report added.
"Bottled water is gaining popularity among consumers because it is thought to be more hygienic than loose normal water in the market, which is not good for health and is unsafe to drink," the report said.
The segment is contested by a number of businesses, including Coca-Cola India through its brand Kinley, PepsiCo's Aquafina, Bailey from Parle Agro, and Rail Neer from the Indian Railway Catering and Tourism Corporation (IRCTC), but they are all lagging behind Bisleri, the market leader.
Tata Chemicals' consumer products division and Tata Global Beverages' beverage division were combined to form TCPL, which aims to be a formidable player in the FMCG sector by stepping outside of its comfort zone and expanding into new markets.
In the latest report, TCPL said "with strong product innovation, investment in strengthening our brands and strategic acquisitions, we are well on track in our journey to become a leading FMCG company".
Ramesh J Chauhan led Bisleri International operates in the segment with bottled water brand Bisleri and spring water Vedica.
It is also present in fizzy drinks with brands - Spyci, Limonata, Fonzo and PinaColada.
Chauhan has also created various super brands such as ThumsUp, Gold Spot, Maaza and Limca, which was acquired by the Coca-Cola Company in 1993 when the Atlanta-headquartered company had re-entered the Indian market.
(with inputs from PTI)
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