Haldiram plans public issue

Kolkata-based confectionery and snacks company Haldiram Bhujiawala Ltd is planning an initial public offer to fund its diversification and expansion programme.

According to Prabhu Shankar Agarwal, the promoter of Haldiram Bhujiawala Ltd, the company is talking to merchant bankers to decide on the modalities, including the exact tranche of money to be raised.

Haldiram Bhujiawala Ltd, which currently has seven company-owned stores and 35 franchises in the city and its suburbs, will use the funds to bankroll its plans to diversify into hotels and retail real estate as well as expand its existing business.

Agarwal has already acquired around 10 acres near Singur on the Durgapur Expressway where it will set up a large manufacturing facility. The project, to cost around Rs 100 crore (Rs 1 billion), will come up in three phases.

Phase I, said Agarwal, would be up and running by the second half of 2007 to cash in on the festive season. It will see the setting up of a factory to manufacture Indian snacks under the "Haldiram's Prabhuji" brand name, which will be 3-4 times bigger than the present one.

The company plans to increase its exports, which are now 20 per cent of its sales, besides appointing more franchisee-stores in places as far away as Siliguri. Increasing its 300-strong distribution network is also on the cards.

In phase II, Agarwal plans to manufacture frozen curries, rotis and the like in the ready-to-eat category. Phase III will have a facility to manufacture eggless western confectionery items like cakes, pastries and pretzels. "Altogether, we will need about 50 acres," he said.

The company has already started construction of a 165-room budget hotel for business travellers and a three-hall convention centre near its Pure Foods outlet on VIP Road, and a 50-room Apollo Sleep Well near the Apollo Hospital on the EM Bypass.