Bidding for a stake in snacks maker Haldiram Snacks Food Pvt Ltd has virtually ground to a halt, with very little headway being made by the parties concerned, pricing and valuation have become major stumbling blocks between the prospective buyers and the seller, sources said.
They however said that the transaction could move forward if Haldiram’s owners were prepared to negotiate.
The Blackstone-led consortium with Singapore’s GIC and Abu Dhabi Investment Authority, after having put in a non-binding bid in May for a majority stake, valuing the snacks company at over $8 billion, has been more or less sitting tight for the past several months.
While there were several discussions after that initial round, there has been no progress, and Blackstone, and its partners have made no further offers. Sources with knowledge of ongoing talks said the seller was undecided, and the bidders could only wait. The Agarwal family is seeking valuations of over $11 billion.
Blackstone did not comment on the deal.
Bain’s entry
Bain Capital with Singapore’s Temasek is the other consortium that has shown interest, and its bid has also valued the company at around $8 billion or slightly more. Despite the stand taken by the owners of Haldiram’s in holding out for a higher valuation, the Bain Capital-Temasek consortium is keen to explore all options including a minority stake. “There are several options on the table,” a source said. This would mark Bain’s entry into the consumer sector in India.
Bain declined to comment while Temasek said it would not comment on market speculation.
businessline also reached out to Haldiram’s Chief Executive Officer Krishan Kumar Chutani, who also declined to comment.
IPO consideration
In June Bloomberg had reported that Haldiram Snacks was weighing the possibility of an initial public offering, as it was not making headway with the PE firms.
Haldiram Snacks Pvt Ltd and Haldiram Foods International Pvt Ltd, belonging to two different factions of the family, have been restructured to demerge the FMCG business into Haldiram Snacks Food Pvt Ltd.
Between FY19 and FY23 Haldiram Snacks’ revenue doubled to ₹6,426.5 crore, according to data provided by Tracxn. Its net profit rose 71 per cent in the same period. Its revenue has been growing 19 per cent CAGR over the last five years while net profit has risen 14 per cent CAGR in the same period.
It generates healthy cash and in FY23 it generated ₹745 crore from operating activities.
Haldiram Foods International’s revenue rose 64 per cent from FY19 to ₹4,191 crore in FY24 and net profit has risen 37 per cent to ₹433.8 crore. It generated over ₹475 crore of cash from operations in FY23.