Blackstone Inc., one of the largest private equity firms globally, is reportedly in advanced discussions with Haldiram’s, India’s leading savouries and snacks business, for a controlling stake. According to sources, these talks have intensified over the past few weeks, focusing on a valuation of up to Rs 70,000 crore.
Consortium Partners and Valuation Challenges
Blackstone, supported by the Abu Dhabi Investment Authority and Singapore’s GIC, has been negotiating with the Agrawal family members based in Delhi and Nagpur. These negotiations, ongoing for several months, have faced delays primarily due to disagreements over the business’s valuation. Initially, it was reported that Blackstone aimed to acquire up to 76 percent of Haldiram’s. However, the family is hesitant to relinquish such a significant share, preferring to retain a larger stake.
Potential Deal Impact
Insiders suggest that the current discussions might lead to a stake sale closer to 74 percent, rather than the initially proposed 76 percent. If successful, this would mark the largest private equity buyout in India to date.
Family’s Considerations and Other Options
Despite the progress, the deal is not guaranteed. Haldiram’s promoters are also considering alternative options, including taking the company public. This option gained traction after bids from private equity investors, valuing the company between $8-8.5 billion, fell short of the family’s $12 billion expectation.
Previous Bids and Public Listing Potential
In addition to Blackstone, Haldiram’s received bids from Bain & Co. and Temasek Holdings. The Agrawal family is also contemplating a potential public listing of the business, as reported by Bloomberg on June 12.
Merger of FMCG Businesses
The Delhi and Nagpur branches of the Agrawal family are working on merging their FMCG businesses under Haldiram Snacks Private Ltd and Haldiram Foods International Private Ltd into a new entity, Haldiram Snack Foods Pvt Ltd. Post-merger, the Delhi arm will hold a 56 percent stake, while the Nagpur arm will own 44 percent. This merger has received approval from the Competition Commission of India and is expected to be completed in the coming months.
Financial Performance of Haldiram
According to Crisil, Haldiram Snacks Pvt Ltd, based in Delhi, reported a revenue of Rs 6,377 crore and a profit of Rs 593 crore in FY23. The business derives 85 percent of its sales from the FMCG sector and 15 percent from its restaurant division. Meanwhile, Haldiram Foods International Pvt Ltd, based in Nagpur, reported a revenue of Rs 5,974 crore and a profit of Rs 794 crore in FY23.
| Entity | Revenue (FY23) | Profit (FY23) | Stake in Merged Entity |
|---|---|---|---|
| Haldiram Snacks Pvt Ltd (Delhi) | Rs 6,377 crore | Rs 593 crore | 56% |
| Haldiram Foods International Pvt Ltd (Nagpur) | Rs 5,974 crore | Rs 794 crore | 44% |
Conclusion
While Blackstone’s potential acquisition of Haldiram’s is gaining traction, the outcome remains uncertain. The Agrawal family continues to explore various options to maximize the company’s value, including a public listing. This development signifies a significant moment in India’s private equity landscape, with the possibility of the largest buyout in the country’s history.
