Tata eyes majority stake in Haldiram's, $10B valuation remains concern
What's the story
Tata Group's consumer unit Tata Consumer Products is reportedly negotiating to acquire at least 51% stake in Haldiram's, a famous Indian snack food maker. The acquisition would put Tata, owner of UK tea firm Tetley and partner of Starbucks in India, in direct competition with Pepsi and Reliance Retail. Haldiram's is also discussing the sale of a 10% stake with private equity firms, including Bain Capital.
Details
Haldiram's is a staple in the Indian snack market
Haldiram's, known for its affordable crispy "bhujia" snack, is a household name in India. Founded in 1937, the company holds nearly 13% of the country's $6.2 billion savory snack market, as per Euromonitor International. Haldiram's products are also available in international markets like Singapore and the US. The company operates around 150 restaurants offering local food, sweets, as well as Western cuisine.
What Next?
Tata is concerned about $10 billion valuation
The potential acquisition of Haldiram's would significantly expand Tata's consumer product reach. However, the company is concerned about the $10 billion valuation sought by Haldiram's, given its annual revenue of around $1.5 billion. Ankur Bisen, the head of consumer and retail at Indian consultancy Technopak, said to Reuters, "No other brand attacks packaged food and food services with equal panache as Haldiram's."
Insights
Haldiram's plans for private equity and IPO
Haldiram's chairperson Manohar Lal Agrawal told CNBC TV18 last year that the company aimed to draw in private equity investors and debut on the stock market within two to three years. The snack maker reported revenue of at least $981 million in the financial year ended March 2022, according to regulatory filings. However, Reuters claims its revenue is now near $1.5 billion, with an annual operating profit of around $200 million.