In a significant move ahead of its anticipated initial public offering (IPO), Haldiram Snacks Foods is set to sell an additional 5 per cent stake to Singapore-based investment firm Temasek. This follows an earlier agreement where Temasek acquired a 10 per cent stake in the company, valuing the Indian snacks giant at USD 10 billion. The latest deal is expected to fetch around USD 500 million, sources close to the development revealed.
The strategic stake sale is part of Haldiram’s broader effort to position itself favorably for the IPO. While the company had initially targeted a higher valuation, recent volatility in Indian stock markets and concerns over food sector performance in the December quarter led to a recalibration of expectations. The pre-IPO placement will provide the company with financial flexibility as it prepares for its market debut.
High Valuation Deters Other Investors
Despite keen interest from multiple private equity players and consumer goods firms, including Tata Consumer Products and Blackstone, most potential buyers opted out, citing concerns over Haldiram’s steep valuation. The Agarwal family, which controls the company, had initially sought more aggressive pricing but had to adjust its stance due to market conditions.
Promoters Retain Control; Funds to Drive Growth
Despite divesting a 15 per cent stake in total, Haldiram’s will continue to be run by its founding Agarwal family. A portion of the proceeds from the stake sale is expected to fuel business expansion, while the rest will be allocated to the family office for other strategic investments.
Sources indicated that the family remains committed to strengthening Haldiram’s position in the fast-moving consumer goods (FMCG) segment, leveraging its extensive distribution network and brand equity to maintain growth momentum.
Haldiram’s Consolidation and Expansion Strategy
Haldiram’s business structure in India is unique, with three separate entities operating independently in Delhi, Nagpur, and Kolkata. However, in a bid to streamline operations, the Delhi and Nagpur branches recently merged their FMCG businesses into a single entity, Haldiram Snacks Foods Private Ltd. (HSFPL). This restructuring consolidated shareholding, with the Delhi-based Haldiram Snacks Private Ltd. (HSPL) holding a 56 per cent stake and Haldiram Foods International Pvt Ltd. (HFIPL) owning the remaining 44 per cent in the new entity.
The company’s restaurant business, a separate operation, has been kept outside the stake sale discussions and remains under the direct control of the promoters.
Looking Ahead
As Haldiram’s gears up for its IPO, the pre-IPO funding from Temasek is expected to bolster its financial position and aid in scaling operations. The company’s strong brand presence in the ethnic snacks segment, combined with strategic restructuring, positions it well for future growth in both domestic and international markets.
Neither the Agarwal family nor Temasek has officially commented on the latest transaction, but industry watchers see this move as a significant step toward Haldiram’s public listing aspirations.
