Hemant Jhaveri acquires 24 percent stake held by Kailash Jhaveri. The Badshah Masala stake sale is the third successive M&A deal in the domestic branded spices segment in 2020 after the twin buyouts of Sunrise Foods by ITC and Eastern Condiments by Norway’s Orkla through its arm MTR Foods
A strategic internal restructuring exercise has been sealed by the Jhaveri family, the promoters of the popular Mumbai-based Badshah Masala, one of India’s oldest spice brands, people with knowledge of the matter told Moneycontrol. The deal represents a paradigm shift in the journey of the firm, which was established six decades ago in 1958, and signals the parting of ways of the key promoters Hemant Jhaveri and his cousin Kailash Jhaveri.
“As part of the deal, Hemant has acquired the 24 percent stake held by his cousin Kailash for around Rs 130 crore, valuing the entire firm for around Rs 540 crore. An agreement to this effect has been signed by both parties,” said one of the persons cited above.
The Badshah Masala stake sale is the third successive merger and acquisition (M&A) deal in the domestic branded spices segment in 2020 after the twin buyouts of Sunrise Foods by ITC and Eastern Condiments by Norway’s Orkla through its arm MTR Foods.
Badshah Masala’s catchy jingle from the 90s ‘Swaadh Sugandh Ka Raja, Badshah Masala’ made the brand a household name. The jingle was also used later on the Mumbai Western Railways suburban train network as part of a campaign.
Hemant now holds a controlling stake with an enhanced shareholding of 79 percent in Badshah Masala, which is managed by Jhaveri Industries. Prior to the transaction, Hemant and Kailash held 55 percent and 45 percent stake, respectively.
“Kailash wants to go solo in the spices business and hence the stake sale. As part of the deal contours, his balance 21 percent stake will be sold to Hemant in a staggered manner – 7 percent annually over a period of three years,” added a second person. A third person confirmed the same.
All three persons spoke on the condition of anonymity. Moneycontrol is awaiting the response to an email query sent to the Jhaveri family and has sent reminders. This article will be updated as soon as we hear from them.
On December 5, 2019, Moneycontrol reported that private equity firm General Atlantic was in talks to acquire Badshah Masala through its investee firm Capital Foods, the owner of the popular Ching’s Secret brand of instant noodles and sauces. The deal did not proceed as per plans. Moneycontrol could not independently verify if the current restructuring exercise at Badshah Masala is linked to any other deal in the future.Badshah Masala competes with brands like Everest, MDH, Catch, Mothers Recipe, Priya and others in the Indian market. Jhaveri Industries had revenues of around Rs 350-400 crore for FY19, according to reports. It sells 48 varieties of blended spices and ground spices ranging from red chilli powder to curry masala and has a manufacturing unit at Umbergaon, Gujarat. Exports to countries like the United States, United Arab Emirates (UAE), Tanzania and Singapore account for a third of the firm's sales.