Capital Foods’ three largest shareholders, Invus Group and General Atlantic, as well as the company’s chairman and founder, Ajay Gupta, have decided to sell their shares for a price between $1 and $1.25 billion. Big FMCG companies like Tata, ITC, Nestle, Kraft Heinz, and Nissin Foods are among the potential bidders. Earlier, Bloomberg said that Nestle was in talks with Capital Foods’ management about a prospective acquisition that would likely value the company at above $1 billion.
Ajay Gupta launched Capital Foods in 1995, and Kishore Biyani, CEO of Future Group, was the company’s first outside investor. For Rs 13 crore, he acquired a 33% stake in the business, which he sold in 2013. Post which, in 2018, General Atlantic joined the team. The company reported sales of Rs 580 crore in 2021–2022—a 14% decrease from FY21. However, the company anticipates generating Rs 900 crore in revenue with a 25% margin in FY23.
It is anticipated that Capital Foods will be sold for full cash or partially in shares. Several prospective suitors have proposed purchasing up to 75% of the business and going public. The deal’s exact structure, however, has not yet been established.
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Ching’s Secret brand spicy noodles and fusion chutneys with purportedly “desi Chinese” characteristics are among Capital Foods’ best-known products. Moreover, it offers masala blends and cooking pastes by Smith and Jones. Both parties may gain significantly from the possible acquisition of Capital Foods by a major global corporation. It would give the buyer a footing in the Indian market and access to a variety of well-known and reputable brands. On the other hand, Capital Foods would profit from the assets, knowledge, and global presence of a significant multinational corporation, which may assist it in growing its operations and entering new markets.
The Indian food market is a fiercely competitive and expanding sector of the economy. The Indian food and beverage industry is anticipated to expand at a compound annual growth rate (CAGR) of 11.1% from 2021 to 2026, according to a report by Research and Markets.
