Tata Tea MD Percy T. Siganporia in Calcutta on Monday. A Telegraph picture

Calcutta, Sept. 19: The branded tea business of Tata Tea Limited may witness a substantial growth following the merger of its 100 per cent subsidiary, Tata Tetley Limited, with itself.

The merger will have an impact on the profitability of Tata Tea, which will be reflected in the current year’s balance sheet.

Tata Tea had called an extraordinary general meeting (EGM) to get shareholders’ approval for the proposed scheme of amalgamation.

Tata Tetley has an export-oriented unit in Cochin, which sends flavoured tea and tea bags to Russia, Poland and other east European countries and Australia.

“The branded tea business of Tata Tea will be strengthened following this amalgamation. It will be easier for Tata Tea to access other parts of the globe with a better product portfolio. The amalgamation will put the company on a sound footing,” company managing director Percy T. Siganporia said on the sidelines of the EGM here today.

Tata Tea currently enjoys a 20.2 per cent market share in value terms and a 17 per cent share in volume terms.

The amalgamation will also help in the topline growth of Tata Tea and clean up its balance sheet. The subsidiary had clocked a turnover of Rs 65 crore and a net profit of Rs 2 crore in 2004-05.

Regarding overseas brand acquisition, Siganporia said, “We are constantly scanning the environment to look at opportunities for growth through mergers, acquisitions and strategic alliances that will complement our portfolio operations. We have been looking aggressively for opportunities in the US. As part of the exercise, we have initiated dialogues with a number of prospective companies.”

“However, we are still at the discussion stage and nothing specific has materialised at this point of time,” he added.

Tata Tea has transferred 16 of its tea estates in south India to Kanan Devan Hills Plantations Company Private Limited. This transfer has resulted in a profit of Rs 10.72 crore.

On the company’s plans for north Indian tea estates, Siganporia said, “We are experimenting with a development model at our two estates ? Borjan and Hatikuli ? in north India. If that is successful, we will implement it in other gardens in the north.”