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Haldiram’s is looking to sell another 5% stake for nearly $500 million; the company will continue to be run by its promoters, the Agarwal family.
Haldiram’s was earlier seeking higher valuation for the company but the extended decline in the stock market has made it difficult to get investors on those valuations.
After signing a deal with Singapore’s Temasek to sell a 10 per cent stake in the snacks business of Haldiram’s, the country’s largest packed snack and sweets company is looking to sell another 5 per cent stake for nearly $500 million, according to a Business Standard report citing sources.
The report, citing the sources, said Haldiram’s will continue to be run by its promoters, the Agarwal family. The family may use part of the proceeds from the sale to expand the business, while the rest will be allocated to the family office for other purposes.
Haldiram’s has been in talks with various buyers, including consumer goods and private equity firms such as Tata Consumer Products and Blackstone, but no deal materialised. This is the first time the company has sold a stake.
The company was earlier seeking higher valuation for the company but the extended decline in the stock market has made it difficult to get investors on those valuations.
Meanwhile, Temasek, Singapore’s state investment company, has signed a deal to acquire nearly 9 per cent stake in Haldiram’s snacks business for about Rs 8,000 crore, according to reports. The deal has valued the entire company at around Rs 90,000 crore.
The agreement follows months of negotiations, with Temasek considering Haldiram’s a “prized asset” that will focus on India’s consumer sector, a source was quoted as saying by Moneycontrol.
The stake acquisition comes shortly after private equity firm Blackstone withdrew from the race to invest in Haldiram’s, citing concerns over valuation.
According to the Moneycontrol report, Haldiram Snacks is also mulling the sale of additional minority stake beyond 9% to other suitors beyond Temasek.
Founded in 1937 in Bikaner, Rajasthan, Haldiram’s has grown into a dominant player in India’s snacks market. According to Euromonitor International, the company holds nearly a 13% share of India’s $6.2 billion savory snacks market. Among its most iconic offerings is “bhujia”, a crispy fried snack made from flour, herbs, and spices, which is available in small mom-and-pop stores for as little as 10 rupees (12 US cents).
Temasek has been steadily increasing its footprint in India with investments in Manipal Hospitals and Devyani International, the operator of KFC and Pizza Hut. With this latest stake in Haldiram’s, the firm is now betting on the country’s booming packaged snacks industry.
Earlier, a demerger of the FMCG business of Haldiram Snacks Private Ltd (HSPL or Haldiram Delhi group) and Haldiram Foods International Pvt Ltd (HFIPL or Haldiram Nagpur group) was initiated to set up a newly-incorporated entity named Haldiram Snacks Foods Private Ltd (HSFPL), wherein existing shareholders of HSPL and HFIPL would acquire 56% and 44% shareholding respectively.
According to a report by Crisil Ratings, the Haldiram Group’s product profile is “diversified, comprising snacks, namkeen, sweets, ready to eat / pre-mix food, frozen food, biscuits, non-carbonated ready to drink beverages, pasta, etc. The group has diverse presence in India and exports to various countries outside India, including the United states of America and Europe”.
