 "After selling 10% stake, Haldiram's to sell another 5% to other investors")
After signing an agreement to sell 10 per cent stake in Haldiram Snacks Foods to Singapore-based Temasek, valuing the company at $10 billion, the Indian ethnic snacks major is looking to sell another 5 per cent in the company for around $500 million, according to sources in the know. This stake sale is part of its pre-initial public offer (IPO) placement.
Other private equity players that were in the race to acquire a stake in the snacks major backed out, citing very high valuations.
Sources added that the company will continue to be run by the promoters — the Agarwal family. The family may use part of the proceeds of the sale to grow the business and the rest may be used by the family office for other purposes.
Haldiram’s was earlier looking for a higher valuation, but the sharp fall in the Indian stock markets in the last six months, and the trends in the December quarter results of food companies made buyers jittery.
The family was not available for comment and Temasek declined to say anything on the deal.
The company has been in talks with various buyers, including consumer goods companies and private equity (PE) companies, to sell the stake. Tata Consumer Products and Blackstone are among those the company is in talks with.
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The Agarwal family operated three separate Haldiram entities in India, with the Delhi, Nagpur, and Kolkata branches running independent businesses under the founder’s brand. However, the Delhi and Nagpur families joined forces to merge the fast-moving consumer goods (FMCG) businesses of Haldiram Foods International Private Ltd (HFIPL) and Haldiram Snacks Private Ltd (HSPL), part of the Haldiram Delhi group, into a newly incorporated entity, Haldiram Snacks Foods Private Ltd (HSFPL).
Under the merger terms, existing shareholders of HSPL and HFIPL would hold 56 per cent and 44 per cent stakes, respectively, in the new entity. HSFPL will oversee the consumer products operations for the entire Haldiram group. The restaurant business was hived off into a separate company and is not put on sale.