Nestlé’s Indian arm has invested Rs7.06bn ($83.9m) in its joint venture with pharma group Dr Reddy’s in India. Nestlé India will maintain a 49% shareholding in the venture, announced in April, with Hyderabad-based Dr Reddy’s holding the remaining stake, as per a stock-exchange filing.
Dr Reddy’s Laboratories has also invested Rs7.34bn in the joint venture. The collaboration aims to target various categories including metabolic, hospital nutrition, healthy aging, general wellness, women’s health, and child nutrition, as disclosed earlier this year.
As part of the agreement, Nestlé India has signed a business transfer agreement for the slump sale of its existing medical nutrition and nutraceuticals business to the joint venture company, at a lumpsum consideration of Rs2.19bn. The companies plan to operate not only in India but also in other agreed territories, as mentioned in the April stock-exchange announcement.
The venture became operational in the second quarter of Nestlé India’s 2024/2025 financial year. During the quarter ending 30 June, Nestlé India’s profit increased by 7% year-on-year to Rs7.47bn from Rs6.98bn in the previous quarter of FY24, while revenue grew by 3.3% to Rs48.14bn.
Suresh Narayanan, chairman and managing director of Nestlé India, expressed satisfaction with the performance amidst challenges such as lower consumption growth, food inflation concerns, and volatile commodity prices. He highlighted the growth across various product groups, with prepared dishes and cooking aids showing promising performance driven by innovations.
Earlier this year, India’s consumer court cleared Nestlé of government allegations of “unfair trade practices” related to the lead contamination scare that affected the Maggi brand in 2015.
