Tata Consumer Products Ltd (TCPL) is in talks to buy at least 51 per cent of popular Indian snack food maker Haldiram’s but is not comfortable with the $10 billion valuation sought, Reuters has reported quoting two people who have been briefed on the matter.
Haldiram’s is also in discussions with private equity firms, including Bain Capital, about the sale of a 10 per cent stake, according to the report.
Tata Consumer Products, which owns UK tea company Tetley and has a partnership with Starbucks in India, has baulked at the $10 billion valuation given that Haldiram’s annual revenue is around $1.5 billion, said the report quoting the sources.
Tata wants to buy more than 51 per cent but has told Haldiram’s that its “ask is very high”.
A spokesperson for Tata Consumer Products, according to Reuters, said it “does not comment on market speculation”.
Family-run Haldiram’s traces its origins back to a tiny shop founded in 1937 and is well-known for its crispy “bhujia” snack sold for as little as 10 rupees across mom-and-pop stores. It has almost 13 per cent share of India’s $6.2 billion savoury snack market, according to Euromonitor International. Pepsi, famous for its Lay’s chips, also has around 13%.
Haldiram’s snacks are also sold in overseas markets like Singapore and the United States. The company has around 150 restaurants selling local food, sweets and western cuisine.
Purchasing Haldiram’s would significantly expand Tata’s consumer products reach.
“If you want to suddenly grow big in size, no one better to provide access than Haldiram’s. No other brand attacks packaged food, and food services, with equal panache,” said Ankur Bisen, head of consumer and retail at Indian consultancy Technopak.
Tata’s consumer unit, which also sells salt, pulses and mineral water, had revenue of $1.7 billion in the past financial year. It is a relatively small part of the Tata Group, whose businesses span autos, aviation and hotels and which had combined revenue last year of some $144 billion.
Haldiram’s Chairman Manohar Lal Agrawal last year told CNBC TV18 in an interview the company wanted to attract private equity investors and debut on the stock market in 2-3 years.
Haldiram’s – which has multiple registered companies in the country – had revenue of at least $981 million in the financial year ended March 2022, according to regulatory filings. The first two sources, however, said its revenue is now close to $1.5 billion and annual operating profit is around $200 million.
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