Tata Consumer Products Ltd is weighing a non-binding bid for the vending machine business of Coffee Day Enterprises Ltd, according to people familiar with the matter.

The board of Tata Consumer Products has approved a proposal to explore an acquisition of the operation from Coffee Day, said one of the people, who asked not to be identified as the information is private. Coffee Day is seeking a valuation of about ₹2,000 crore for the vending machine business, another person said.

Coffee Day, the owner of India’s largest coffee chain, has been trying to sell assets to repay lenders after the death of its founder V G Siddhartha last year. It had agreed to sell its corporate business park to Blackstone Group Inc.

Also read: ’Siddhartha was buried by the hydraulic pressure of debt’

The potential deal comes as Tata Consumer, whose products include Tata Tea, Tetley and Tata Salt, is seeking to expand its presence in the world’s second-most populous country. It also has a joint venture with Starbucks Corp. in India.

Deliberations are at an early stage and Tata Consumer could still decide against an offer, the people said. Coffee Day is also in talks with other potential suitors for the vending business, one of the people said.

Shares of Tata Consumer rose 52 per cent in Mumbai this year, giving the company a market value of about $6 billion. Trading of Coffee Day remains suspended.

Coffee Day is looking to induct strategic and financial partners into businesses as part of an ongoing reconstructing exercise, its representative said in an emailed response to Bloomberg News. There are several ongoing discussions but none of them have reached any conclusive stage, the representative added. A representative for Tata Consumer didn’t immediately respond to requests for comment.

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