Haldiram's promoters now offer a smaller bite to investors

The promoters of Haldiram Snacks Food Pvt Ltd. are now looking to offload 10-15% stake against the initial plan to sell a majority holding in India’s largest snack-maker that has drawn interest from top global investors, said three people with the knowledge of the development.

Private equity firms Bain Capital, Blackstone and Temasek Holdings are evaluating the deal, the people said on the condition of anonymity.

Also read |  Haldiram in talks to acquire majority stake in rival Prataap Snacks

“The family does not want to sell a controlling stake anymore. It is most likely now a minority deal," said one of the persons quoted above. “It is a well-run business that is profitable and generates a lot of cash. This (minority deal) makes more sense now."

Mint first reported in May on Bain, Blackstone and Temasek showing interest in picking a controlling stake in Haldiram, the parent of namesake snacks and savoury brand Haldiram’s. At the time, the firms were looking at acquiring 51%, valuing it at $8-10 billion.

Global consulting firm PwC India is advising the families on the deal.

Chasing a slice

The investors are chasing to own a slice of India’s growing snacks market that is estimated to double in size to ₹95,521.8 crore by 2032.

“The firms have got access to the data room of the company and the due diligence is currently on," the second person said.

Emailed queries to spokespersons of Haldiram Snacks Food, Bain Capital, and Blackstone did not elicit any response. A Temasek spokesperson declined to comment.

Earlier, Blackstone was looking to team up with GIC and Abu Dhabi Investment Authority or ADIA for the controlling stake. At the same time, Bain Capital, too, was hoping to team up with some of its limited partners, or investors in their funds, to bid for a large cheque, the Economic Times reported.

Also read |  Indian snack maker Haldiram's considers to raise funds via IPO: Report

“The PE firms are also more comfortable with a smaller cheque and yet get a chance to play in the growing F&B market in India through this company," the third person cited above. “Eventually, the idea would be to list such an iconic brand over the near term."

The deal comes on the heels of the merger of the Nagpur and Delhi factions set into motion last year. As part of the reorganization, the groups carved out the fast-moving consumer goods business of Delhi’s Haldiram Snacks Pvt Ltd (HSPL) and Nagpur’s Haldiram Foods International Pvt Ltd (HFIPL) into a newly incorporated entity named Haldiram Snacks Foods Pvt Ltd. That is 56% owned by HSPL and 44% by HFIPL.

The Delhi business was primarily run by Manohar Agarwal and Madhu Sudan Agarwal, while the Nagpur operations were led by Kamalkumar Shivkisan Agrawal, grandsons of Haldiram founder Ganga Bhishen Agarwal, who started the business in 1937.

Expanding business

Haldiram, which started out as a small family-owned sweetshop, today sells more than 400 varieties of sweets, namkeen, confectionery, ready-to-eat and frozen food, non-carbonated beverages and pasta, among other items, across 100 countries including the US and European nations.

The group’s total revenue, including its overseas business, is being pegged at more than ₹10,000 crore or $1.2 billion, the people quoted above said.

Also read |  Blackstone makes move into Indian snacks market with 51% stake in Haldiram’s

In the Indian snacks and savoury market, Haldiram’s competes with Conagra Brands, Balaji Wafers, Bikanervala Foods, ITC, Parle Products, PepsiCo, Prataap Snacks, TTK Foods (TTK Healthcare), and Urban Platter, among many others.

The market, according to a January report by research firm IMARC Group, is expected to more than double in size from ₹42,694.9 crore in 2023 to ₹95,521.8 crore by 2032, expanding at a compounded annual growth rate of 9.08% during the period. This is driven by increasing urbanization along with rising disposable incomes and changing lifestyles with people adopting ready-to-eat foods, the report said.