BackCremica eyes fundraise as investor plans exit
Kroll Inc's asset management unit that acquired a minority stake in Cremica from private equity firm Rabo Equity Advisors in 2022, plans to exit
PremiumMumbai: Packaged foods and condiment maker Cremica Foods Industries Ltd is in talks to raise ₹500 crore from fresh investors as it plans to enter new categories as well as allow early investors to exit.
Private equity firm Rabo Equity Advisors, which was the investment advisors for India Agri Business Fund II acquired a minority stake in Cremica for $15 million in June 2016. In 2022, Rabo Equity Advisors—where the Dutch lender Rabo Bank held stake—sold its partnership in India Agri Business Fund to advisory firm Kroll Inc's asset management unit. An email seeking comments from Kroll did not elicit a response.
The ongoing fundraise in Cremica will provide an exit to Kroll and several of India Agri Business Fund limited partners, who are largely foreign development finance institutions.
The company has appointed an investment banker to run the mandate, said people familiar with the fundraise. "A few investors are in talks," one person familiar with the deal said, asking to remain anonymous.
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Cremica Foods Industries is run by Akshay Bector, chairman and managing director. The Bector family also operates Mrs Bectors Food Specialities Ltd, founded by Akshay ’s mother Rajni Bector. However, in 2013 the family, including the three Bector brothers, agreed on a settlement in which the biscuit and bakery business was demerged from the condiments business. Mrs Bectors Food Specialties Ltd (bakery) is run by Anoop Bector, while Cremica Foods (condiments) is run by Akshay Bector. In December 2020, Mrs Bectors Food Specialities Ltd hit the stock markets.
Meanwhile, Cremica Foods has a large business-to-business arm where it supplies ketchups and condiments to fast food chains such as McDonald’s and Subway in India. It also has a branded foods business where it sells ketchups, sandwich spreads, salad dressings, chutney and mayonnaise under the Cremica brand, apart from selling to the hotel restaurant and catering (HORECA) industry. A few years ago, it also launched Opera branded chips.
In 2015, Cremica Food Industries had raised $15 million from Rabo Equity Advisors Pvt. Ltd, the investment advisors for India Agri Business Fund II (IABF-II), by selling a minority stake. IABF-II is a $200 million private equity (PE) fund targeted at expansion and growth of Indian food and agribusiness companies in India by Rabobank along with other investors. Cremica Food was the first investment by the fund.
“The total fundraising primary and secondary could be in the range of about ₹500 crore. Business plans are developing around that. Depending on the quality of investors, valuations could touch almost ₹1,800 crore," said Akshay Bector. The company will also eye a public market listing 12 months post its fund raise, said Bector.
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The company exited FY24 with a topline of ₹340 crore. The pandemic impacted the company’s retail or branded business, which it is now trying to build back by expanding distribution of its Cremica branded products in retail shelves, Bector said. Its products are retailed in 20,000 outlets
The company already operates a food park in Himachal Pradesh where it plans to double capacity this fiscal. “There's a new capacity being added in the food park this year, and we're expecting to almost double capacity by the end of the current financial year," he said. This will require a capex of ₹20 crore to ₹30 crore to be funded from internal accruals and debt, he said.
Capital raised will be utilized to enter new packaged food categories such as pickles, beverages and snacks.
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“The first focus is going to be expanding the retail market for Cremica. We will also seriously expand our HORECA market this year. We will be getting into some adjacent categories—like snacking pickles, and beverages. So we are identifying some opportunities and as the fundraise happens, basis that, business plans will develop very quickly," he said.
The company is largely present in the top metros. It competes with Veeba, Tops and Hindustan Unilever's Kissan in India.
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