Temasek nears deal to buy 10% stake in Haldiram's at $10 billion valuation

Both the Agrawal family and Temasek have signed a term sheet for a stake sale by the Agrawal family

After prolonged negotiations, Singapore government-owned investment firm Temasek is nearing a deal to acquire a 10 per cent stake in the consumer products firm Haldiram Snacks Foods, valued at $10 billion, from the promoters.

 

Both the Agrawal family — the promoters of Haldiram Snacks Foods — and Temasek have signed a term sheet for the deal, Moneycontrol reported on Tuesday.

 

Haldiram Snacks Foods is the combined fast-moving consumer goods (FMCG) business of the Delhi and Nagpur families of the snack major.

 

Temasek was one of several private equity (PE) firms, including Bain Capital and Blackstone, that had made offers to the Agrawal family to purchase a stake in the unlisted firm. 

 

The competing offer from American PE major Blackstone was for a 20 per cent stake but at a lower valuation.

 

Temasek is now moving forward with due diligence and is expected to make a binding offer within a month. If the deal fructifies, it would be one of the largest deals in India, considering the total valuation (see chart). The promoters are looking to list the company within a year to cash in on the ongoing initial public offering boom, bankers said. 

 

A Temasek spokesperson declined to comment on “market speculation”. The Agrawal family did not respond to email queries on Tuesday.

 

Earlier, Temasek officials had expressed optimism about India’s health care, consumer products, and information technology sectors. The firm plans to invest $10 billion in India by 2027, bringing its total exposure in the country to $47 billion. This figure excludes investments made by Temasek subsidiaries in India, its head of India and strategic initiatives Ravi Lambah had said in July last year. Temasek is looking at four themes for investments: increasing lifespan via healthcare, consumption, digitisation, and sustainability.

 

The Agrawal family operates three different entities in India, with Delhi, Nagpur, and Kolkata families running separate businesses under the founder’s Haldiram brand. However, the Delhi and Nagpur families merged the FMCG business of HFIPL and Haldiram Snacks, part of the Haldiram Delhi group, into a newly incorporated entity named Haldiram Snacks Foods Private Ltd (HSFPL). The existing shareholders of HSPL and HFIPL acquired 56 per cent and 44 per cent shareholding, respectively, in the merged entity. Post completion of the transaction, HSFPL would undertake the consumer products operations of the entire Haldiram group.

 

In November, Kolkata-based Haldiram Bhujiawala sold a minority stake to Bharat Value Fund for Rs 235 crore. Haldiram Bhujiawala retails its products under the brand “Prabhuji”.

 

PE officials said the Indian company had huge potential, with a large export market waiting to be exploited for Haldiram’s food products.

 

In FY23, Haldiram Snacks reported revenue of Rs 6,375 crore, compared to Rs 5,195 crore in FY22, on a consolidated basis. Its net profit was up 74 per cent to Rs 593 crore in FY23. Haldiram Foods International saw its consolidated net sales at Rs 4,551 crore, up 10.9 per cent in FY24, and its net profit stood at Rs 597 crore, compared to Rs 436 crore in FY23.