Haldiram’s In Talks To Raise Rs. 1,300 Crore From PE Firms

Snack-food manufacturer Haldiram’s is in talks with private equity firms to raise nearly Rs. 1,300 crore in a financing round. The deal will likely value the company at Rs. 6,700 crore, according to reports in Times of India. The investment deal has attracted firms such as Capital International, Everstone Capital, General Atlantic Partners, WestBridge Capital and TA Associates and will likely lead to acquiring of a minority stake in the company. 

Merging Of Hubs

Haldiram’s has seen tremendous growth over the past two decades to become India’s most visible snacks brand. The company operates from three main hubs in the country – Delhi, Nagpur and Kolkata – and through this investment deal, the hubs in Delhi and Nagpur, which holds the Haldiram’s trademark, will be merged into one entity. The Delhi and Nagpur hubs account for nearly three-fourths of the company’s operations while the Kolkata hub mainly transacts within West Bengal. 

Family-Owned Business

Haldiram’s was founded by Gangabhisan Bhujiawala (Agarwal), who started it as a sole shop in Rajasthan in 1937. Through a split in the Agarwal Family in the 1990s, the business was divided geographically at Delhi, Nagpur and Kolkata. Although Haldiram’s is lagging behind PepsiCo, ITC and local player, Balaji Wafers, in the snack category in the country, it has seen its market share steadily rise in the past three years. The Delhi hub accounts for the largest unit with nearly 20 percent of its business coming through its retail outlets and restaurants. 

Although PE investors have shown interest in acquiring stake in local food brands, there has been a forcible resistance from these brands, which are mostly family-owned. Capital International came close to investing in Balaji Wafers but the deal was nullified due to family disputes.