Race for Haldiram Snacks: Temasek seals deal for minority stake at $10-bn valuation

Race for Haldiram Snacks: Temasek seals deal for minority stake at $10-bn valuation

Singapore sovereign wealth fund Temasek has signed definitive agreements to pick up a minority stake of around 9% in Haldiram Snacks, the combined FMCG business of the Delhi and Nagpur families of the Indian multinational snacks and savoury foods giant, for around Rs 8,000 crore, multiple industry sources in the know told Moneycontrol on the condition of anonymity.

An official announcement on the deal can be expected later this month following certain approvals, these sources added.

A 9% stake for Rs 8,000 crore translates into a valuation of around Rs 89,000 crore for the entire firm or around $10 billion, making it one of the biggest transactions in the domestic consumer segment in recent times.

On January 12, Moneycontrol was the first to report that Temasek and Haldiram were nearing a final pact for the mega pre-IPO transaction.

Temasek will emerge as the lead investor with the maximum minority stake and was picked due to its proven track record in the consumer sector and its partnership mindset, the January 12 report added.

Haldiram Snacks is also mulling the sale of additional minority stake beyond 9% to other suitors beyond Temasek.

"Blackstone and Alpha Wave Global have expressed interest earlier in the transaction, so their participation cannot be ruled out for the additional minority stake leg of the deal, though no final call has been taken yet," the January 12 report further said.

There is industry buzz about HNIs (high net-worth individuals) potentially participating in the transaction for the additional minority stake, though this could not be independently verified by Moneycontrol.

Earlier, on January 7, Moneycontrol was also the first to report that Temasek had signed a term sheet to pick up a sub 10% stake in Haldiram Snacks and would proceed with final pacts later .

Earlier, news reports have indicated that Haldiram may look to sell upto 20% stake as part of the ongoing attempt to unlock value in the firm.

When contacted, Temasek declined to comment on "market speculation." Moneycontrol is awaiting the response to an email query sent to the Haldiram Group and will update this story as soon as it hears from the firm. Blackstone declined to comment and Alpha Wave Global could not be reached for an immediate comment.

To be sure, the initial discussions with multiple bidders were linked to the sale of a majority or controlling stake in Haldiram Snacks, but at a later stage, the transaction pivoted to a part stake sale.

Earlier, a demerger of the FMCG business of Haldiram Snacks Private Ltd (HSPL or Haldiram Delhi group) and Haldiram Foods International Pvt Ltd (HFIPL or Haldiram Nagpur group) was initiated to set up a newly-incorporated entity named Haldiram Snacks Foods Private Ltd (HSFPL), wherein existing shareholders of HSPL and HFIPL would acquire 56% and 44% shareholding respectively.

According to a report by Crisil Ratings, the Haldiram Group's product profile is "diversified, comprising snacks, namkeen, sweets, ready to eat / pre-mix food, frozen food, biscuits, non-carbonated ready to drink beverages, pasta, etc. The group has diverse presence in India and exports to various countries outside India, including the United states of America and Europe".

Meanwhile, shares of Haldiram's smaller listed peer Bikaji Foods International have risen by nearly 27% in the last year. The firm's market cap stood at Rs 16,447 crores at the end of day's trade on March 11.