Aachi Masala spices up growth plans, eyes up to $100 million from IndiaRF

Aachi Masala, the iconic Chennai-based food brand, is in talks with private equity firm India Resurgence Fund (IndiaRF), backed by Piramal Enterprises and global private equity major Bain Capital, to raise $80-100 million, three people familiar with the matter told Mint. If finalised, the deal would mark the first external funding for Aachi, which has bootstrapped its success for nearly three decades.

“The talks are in advanced stages but are taking some time to close as the investment firm is still conducting due diligence procedures which is taking longer than anticipated due to Aachi’s complex business model," one of the people cited above said.

The funds will fuel Aachi's national expansion ambitions, propelling it beyond its South Indian stronghold, said another person cited earlier.

While IndiaRF did not respond to Mint’s request for a comment, Aachi denied the ongoing discussions.

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Founded in 1995 by AD Padmasingh Isaac, Aachi has established itself as a household name, offering a wide range of South Indian staples including spices, masalas, pickles, and ready-to-eat mixes. The company has demonstrated robust financial performance, with revenues climbing from ₹1,633 crore to ₹2,017 crore in FY23, while profit increased to ₹22.2 crore from ₹8.75 crore in FY22, documents sourced by research platform Tofler showed.

A spicy battleground

The Indian spice market is intensely competitive, with regional players like Sakthi and ITC-backed Sunrise, Goldiee and Catch, and national giants such as MDH and Everest, all vying for dominance. Aachi has attracted interest from multiple investors over the years. Last year, Tata Consumer Products and Wipro Consumer Care and Lighting reportedly considered acquiring a stake in the company for approximately ₹1,000 crore, according to media reports.

The sector has seen a surge in deal-making activities, driven by changing consumer behaviours and increased culinary experimentation.

In 2022, FMCG major Dabur India acquired a 51% in Badshah Masala in a ₹587.52-crore deal, marking its entry in the fast-growing spices and seasoning category, Mint had reported.

Bengaluru-based Lal Sweets recently sought to raise about $40 million from private equity investors, including the Motilal Oswal Group, at a valuation of $175 million, Mint reported last month. Similarly, Chennai’s Adyar Ananda Bhavan was reportedly looking to secure ₹1,000-1,200 crore by diluting a 35% stake, according to Economic Times.

A 2021 report by Avendus highlighted the dominance of regional players in the spices market, a category where multinational companies struggle due to local taste preferences. National brands often adapt their products to cater to regional tastes.

The report also noted that major players in the spices segment are increasingly focusing on blended spices to build brand loyalty and achieve higher margins. Additionally, there is a growing adoption of international spice blends, such as Schezwan and Italian herbs, alongside a rising demand for dish-specific masalas and convenience-based products in the ready-to-cook segment.

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According to research firm IMARC Group, the Indian spices market reached ₹1.80 trillion in 2023, with projections to grow to ₹4.70 trillion over the next eight years, driven by increasing demand in the food and beverage sector and the introduction of new spice blends.