Authum Investment & Mahi Madhusudan Kela to acquire ₹846.60 crore stake in Yellow Diamond-maker Prataap Snacks

Authum Investment & Infrastructure Limited and investor Mahi Madhusudan Kela are set to buy a significant stake in Pratap Snacks Ltd., which operates the snack brand Yellow Diamond for ₹846.60 crore, according to the company’s BSE filing on Friday, September 27.

The company has entered a share purchase agreement with the promoters to acquire a 46.85 per cent stake in the company from Peak XV Partners Growth Investments I, Peak XV Partners Growth Investment Holdings II and Sequoia Capital GFIV Mauritius Investments, the three private equity promoters.

Prataap Snacks Ltd shares were trading 0.14 per cent lower at ₹1,052.25 as of 02:34 pm on Friday, compared to ₹1,053.75 at the previous market close. The company announced the details of the acquisition during pre-market open hours on Friday.

According to a Bloomberg report, the stock gained 12 per cent, hitting its highest level in more than seven months after the development.

"The acquirer and PAC have entered into a share purchase agreement dated September 26, 2024, with the sellers, pursuant to which the acquirer has agreed to acquire from the sellers 1.02 crore equity shares of the target company for ₹746 per equity share for an aggregate consideration of ₹846.60 crore,” said the company in the exchange filing.

Apart from this, the company has also announced an open offer to acquire a 26 per cent stake in the company from the market. The acquiring entities made an open offer for 62.98 lakh equity shares, representing a 26 per cent stake for ₹544 crore at a price of ₹864 per share, as per the filing.

What is Prataap Snacks

Prataap Snacks, an Indore-based snack maker, sells chips, nuts, and crisps under the Yellow Diamond brand. According to the news agency PTI, it operates 15 manufacturing facilities and partners with more than 5,200 super or sub-distributors, which helps it reach over 2.5 million touchpoints in India.

The acquisition comes at a time when competitors like Bikaji Foods International Ltd. and Mrs Bectors Food Specialities Ltd. have gained more than 70 per cent as investors and are betting that the data on consumption and changes in lifestyle patterns will drive consumption for light meals in India, as per the Bloomberg report.

Indian snacks market is set to more than double in size to $10.6 billion by 2032 compared to nearly $5.1 billion in 2023, reported the agency citing IMARC, a market research firm.