Blackstone Inc - one of the largest names in private equity - is in advanced talks with family members running India’s largest savouries and snacks business Haldiram's, for a controlling stake in the business at a valuation of up to Rs 70,000 crore, said people aware of the development.
Blackstone, along with consortium partners Abu Dhabi Investment Authority and Singapore’s GIC - backers of Blackstone’s global funds - have been in talks with the Delhi and Nagpur-based members of the Agrawal family for the last few months, but differences over valuation of the business have delayed the negotiations. The Economic Times first reported on May 14 that the Blackstone consortium was in talks to acquire up to 76 percent stake in the snack maker.
Sources have now said that talks between Haldiram's promoters and Blackstone have gained momentum once again over the last few weeks.
“There has been a lot of back and forth with the family members over the valuation of the business. Also the family is not looking at giving away a 76 percent controlling stake, which the private equity investors wanted, and want to retain a larger share of the business. Some family members would like to sell only a 51 percent stake but the current discussions with Blackstone are likely to see a stake sale of closer to 74 percent,” said one of the people cited above.
If a deal materialises, it will be the biggest private equity buyout in India till date.
Also Read: Blackstone plans to invest $25 billion in India private equity assets over five years
To be sure, the stake sale talks with Blackstone may still fall through, and the Haldiram's promoters may opt for other options including taking the company public, sources said.
Bloomberg reported on June 12 that the Agarwal family is evaluating a potential public listing of the business as bids from private equity investors - valuing the company between $8-8.5 billion - did not meet family’s expectation of $12 billion. Apart from Blackstone, Haldiram's had also received bids from PE firm Bain & Co. and Temasek Holdings, the report added.
A spokesperson for Blackstone declined to comment on the development. Haldiram CEO KK Chutani too declined to comment.
The Delhi and Nagpur branches of the Agrawal family have been working on a merger of their FMCG businesses under Haldiram Snacks Private Ltd and Haldiram Foods International Private Ltd into a new entity - Haldiram Snack Foods Pvt Ltd. The Delhi arm of the family will hold a 56 percent stake in the newly merged entity, while the Nagpur arm will own a 44 percent stake. The merger has received approval from the competition watchdog Competition Commission of India and is expected to be closed in the next few months.
According to reports by rating agency Crisil, the Delhi-based business Haldiram Snacks Pvt Ltd reported revenue of Rs 6,377 crore in FY23 and profit of Rs 593 crore. The Delhi-headquartered business derives 85 percent of its sales from the FMCG business while 15 percent comes from its restaurants business. The Nagpur business, Haldiram Foods International Pvt Ltd, reported a revenue of Rs 5,974 store and a profit of Rs 794 crore in FY23.
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