Temasek buys 10% in Haldiram’s for ₹8,500 crore

Singapore government’s private equity arm Temasek agreed to acquire a 10% stake for ₹8,500 crore in Haldiram Snacks Food Pvt. Ltd., the parent of eponymous and India’s largest snacks brand Haldiram’s, said two people aware of the development.

The deal values the business at $10 billion or ₹85,000 crore, the first person cited above said, speaking on the condition of anonymity as details are not public yet. “The family is likely to sell another 5% stake in the business to either Blackstone and consortium or Alphawave Global,” the person added.

The stake sale talks with Blackstone and Alphawave will likely be on the same financial terms as that of Temasek, said the second person cited above, who also didn’t want to be identified. “The agreement with Temasek has been signed. The family is in talks with the other two bidders.”

The agreement concludes the more than year-long talks for one of India’s largest PE deals in the segment by valuation. For any firm to write such a large cheque in India is also a mark of confidence in the business and the brand’s growth prospects.

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According to the second person cited earlier, the company is likely to list in the next 24-36 months, paving the way for the PE firms to be able to monetize from this high-stake deal.

Emailed queries to spokespersons of Haldiram Snacks Food, Blackstone, Alphawave Global, and Temasek did not elicit a response until press time.

Family business reorganization 

The deal follows the merger of the Nagpur and Delhi factions of the business, which was set into motion last year. The groups demerged the fast-moving consumer goods (FMCG) business of HSPL and Haldiram Foods International Pvt Ltd (HFIPL–part of the Haldiram Nagpur group) into a newly incorporated entity Haldiram Snacks Foods Pvt. Ltd (HSFPL). Existing shareholders of HSPL and HFIPL hold 56% and 44%, respectively, in the new entity.

Manohar Agarwal and Madhu Sudan Agarwal primarily ran the Delhi business. The Nagpur part of the family was led by Kamalkumar Shivkisan Agrawal, grandsons of Haldiram founder Ganga Bhishen Agarwal, who started the business in 1937.

Starting out as a small family-owned sweetshop, Haldiram today comprises more than 400 varieties of namkeen, confectionery and ready-to-eat food sold across 100 countries. The company offers snacks, namkeen, sweets, ready-to-eat/pre-mix food, frozen food, biscuits, non-carbonated ready-to-drink beverages and pasta. The group also exports to various countries, including the US and those in Europe.

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In the Indian snack and savoury segment, Haldiram’s competes Conagra Brands, Balaji Wafers, Bikanervala Foods, ITC, Parle Products¸ PepsiCo, Prataap Snacks, TTK Foods (TTK Healthcare) and Urban Platter, among others.

The company has a revenue of around ₹14,000 crore and earnings before interest, tax, depreciation, and amortisation or Ebitda margin of around 20-21% in FY24.

The company, which has cornered more than 40% of the snacks and savoury market in India, has been growing at a compounded annual growth rate of 16-17%. 

“It’s an amazing business and that is why so many PE firms have been chasing them for a deal,” the first person quoted earlier said.

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