The prospective bidders of Haldiram Snacks Foods (HSFPL), a leading food firm, have sought clarity on the ownership of the brand as it is currently owned by different family factions.
The Delhi and Nagpur families have decided to merge their operations and formed a joint venture to sell part of their stake. On the other hand, the Kolkata family runs its separate, independent operations.
Bankers said prospective bidders of the company do not want any confusion over the brand in future.
They have sought clarity over usage of the brand.
“The talks are currently on how to solve the issue,” said a banker.
Mails sent to Haldiram families on Friday did not elicit any response.
Business Standard had reported that promoters of HSFPL are reluctant to sell their stake in the food company at the reported offers of $8.5 billion by private equity (PE) firms.
The PE firms had made non-binding offers to buy the company.
The promoters are not enthused by the offer made by consortia led by Temasek and Blackstone and may even look to launch an initial public offering (IPO), said bankers.
Last year, the two family factions from New Delhi and Nagpur had decided to merge their operations.
The third family faction from Kolkata is not part of the new merged entity.
The Kolkata family has the rights to use the Haldiram brand like the other two factions.
The Haldiram family's transaction involves demerger of the fast-moving consumer goods (FMCG) businesses of Haldiram Snacks Pvt Ltd (HSPL) and Haldiram Foods International Pvt (HFIPL) (part of the Haldiram Nagpur group) into a newly incorporated entity called HSFPL.
Existing shareholders of HSPL and HFIPL would acquire 56 per cent and 44 per cent stake, respectively.
Post completion of the transaction, HSFPL will undertake the FMCG operations of the entire Haldiram group.
In September last year, Tata Consumer was also in talks to buy 51 per cent stake in Haldiram but was not comfortable with the $10 billion (Rs 83,300 crore) valuation sought by the promoters, Reuters had reported.
According to the news agency, it was in talks to sell an additional 10 per cent stake to Bain last year too before its potential listing in the stock markets. But the deal fell through.
In FY23, Haldiram Snacks reported a revenue of Rs 6,377 crore compared to Rs 5,195 crore in FY22 on a standalone basis, according to a statement by CRISIL Ratings in February.
It also said profit after tax (PAT) was up 74 per cent to Rs 593 crore in FY23.
In the Rs 19,300 crore ethnic savoury and western snacks market, Haldiram (Delhi and Nagpur) lead with 36 per cent share, according to a report by Frost & Sullivan.
The segment is witnessing increasing competition from multinationals like Pepsi as well as Indian companies.
Family matters
- The brand is currently owned by different family factions
- Delhi and Nagpur families have decided to merge operations and formed a joint venture to sell part of their stake. The Kolkata family runs its separate, independent operations
- Prospective bidders of the company do not want any confusion over the brand in future, say bankers
- The Haldiram family's transaction involves demerger of the FMCG businesses of Haldiram Snacks Pvt Ltd (HSPL) and Haldiram Foods International Pvt (HFIPL) into an entity called HSFPL
