Singapore’s Temasek, a titan in global investment, is close to clinching a 10% minority stake in Haldiram Snacks Foods. This move values the Indian snack powerhouse at a staggering INR 83,500 crore to INR 91,700 crore (USD 10-11 billion). It’s a clear signal of Temasek’s faith in Haldiram’s growth and its leading role in India’s FMCG arena.
Key Highlights of the Deal
- A term sheet has been signed between Temasek and Haldiram’s promoters, the Agarwal family, focusing on this minority stake acquisition.
- Positioned as a precursor to an IPO, this deal aims to set a valuation benchmark for the company, with expectations of a public listing in the next 12-24 months.
- Temasek’s stake is less than 10%, indicating potential for more private equity involvement down the line.
- This deal could also be the key to unlocking further international partnerships as the company eyes of global markets.
Behind the Negotiations
After Bain Capital stepped back due to valuation discrepancies, Temasek took the lead. Bain had pegged Haldiram’s value at INR 75,000-80,000 crore (USD 8.8-9.4 billion), far from Temasek’s more generous valuation of INR 83,500-91,700 crore. Alpha Wave Global, with backing from Chimera Capital, was in the race but didn’t match up. Blackstone, on the other hand, wanted a 20% stake but with strings attached to management control, a proposal the Agarwal family swiftly declined, showing their commitment to maintaining operational control while welcoming investment.
Haldiram: A Behemoth in India’s Snack Industry
Haldiram Snacks Foods now operates as a single entity post-merger of its Delhi and Nagpur branches, approved by the NCLT and CCI in April 2024. This merger has not only streamlined operations but also made the company more appealing to investors. With exports to over 100 countries and a product lineup exceeding 500 items, including namkeen, sweets, and beverages, Haldiram stands tall in the market.
Haldiram’s Financial Performance and Growth Strategy:
- FY24 Revenue: INR 12,800 crore
- Profit After Tax: INR 1,400 crore
- The company has expanded into chocolates with the Cocobay brand and ventured into quick-commerce platforms.
- Strategic acquisitions like Babaji Namkeen, Akash Namkeen, and Atop Foods have broadened its market footprint.
Haldiram has also pushed into new areas like retail supermarkets and ready-to-eat meals under sub-brands such as Minute Khana and Cookie Heaven, targeting the urban consumer base. This diversification strategy caters to shifting consumer tastes, reinforcing company’s market dominance.
Future Prospects: IPO and Beyond
With Temasek’s investment, Haldiram’s IPO seems on the horizon, projected to occur within the next two years with a valuation possibly reaching INR 93,500 crore (USD 11 billion). This would mark one of the largest IPOs in India’s FMCG sector. The investment landscape views this as a golden opportunity for returns, thanks to its robust market presence and growth potential. Temasek’s long-term investment strategy in India further bolsters this confidence.
Temasek has set sights on investing USD 10 billion in India by 2027, aiming to escalate its total exposure to USD 47 billion. Investment areas include healthcare, digitization, and sustainability—fields where Haldiram’s innovative strategies align perfectly.
Conclusion
Temasek’s investment in Haldiram to grab a 10% stake marks a big moment for India’s FMCG landscape. With a wide array of products and some pretty bold expansion plans, the company looks set for a bright future. This deal, slated to finalize by January 2025, could be one of the heftiest transactions in India’s food and drink industry. It’s paving the way for Haldiram to go public, boost its profits, and spread its wings globally.
