Dabur India to acquire 51% stake in Badshah Masala in Rs 587.52-cr deal

Home-grown FMCG firm Dabur India on Wednesday said it will acquire 51 per cent stake in Badshah Masala in a Rs 587.52-crore deal, marking its entry in the fast-growing spices and seasoning category.

The company has signed definitive transaction agreements to acquire 51 per cent shareholding of Badshah Masala Pvt Ltd, a firm engaged in manufacturing, marketing and export of ground spices, blended spices and seasonings, said a joint statement.

"The acquisition is in line with the company's strategic intent of entering into new adjacent categories in the food space," Dabur India said in a regulatory filing.

Over the acquisition cost, Dabur India said "51 per cent equity shareholding has been agreed at Rs 587.52 crore less proportionate debt as on the closing date", with the Badshah enterprise being valued at Rs 1,152 crore.

While the balance 49 per cent of the equity share, Dabur said is "to be acquired after a period of 5 years."

With this acquisition, Dabur India aspires to "expand its Foods business to Rs 500 crore in 3 years and expand into new adjacent categories," said a company statement.

This also marks Dabur's entry into the over Rs 25,000-crore branded spices and seasoning market in India.

After this, Dabur joins the league of other FMCG makers such as Emami, Tata Consumer Products Ltd and ITC, which are already present in the spices market.

The Indian spices market which is traditionally retailed in loose form is gradually witnessing a shift towards the branded players with packaged products as consumers no longer have time to grind spices at home and are looking for convenience and safety issues.

"The Indian spices and seasoning category is a large and attractive market. Badshah Masala is one of the key players in this space. Our investment in Badshah Masala will help expand this business and continue to provide unmatched quality products," Dabur India Chairman Mohit Burman said.

Burman further added that "this acquisition will accelerate our growth strategy as we continue to build our Foods business. We intend to leverage our international market presence to grow this business globally."

Founded in 1958, Badshah Masala's turnover in FY 2021-22 was at Rs 189.1 crore. The Jhaveri family-managed company gets the majority 82 per cent of its revenue from blended spices and has 2 manufacturing facilities located in Umargam, Gujarat.

Badshah Masala Managing Director Hemant Jhaveri said: "Joining hands with Dabur will help drive the future growth potential of Badshah on a stronger trajectory. Our companies are a great fit. This transaction will enable us to accelerate our growth by adding our products to Dabur''s broad portfolio to meet the needs of consumers across geographies."

Dabur India Ltd is the fourth largest FMCG company in India and had a revenue of Rs 10,888.68 cr in FY22. It is also a leading ayurvedic and natural health care company with a portfolio of over 250 herbal/ayurvedic products.