Tata Looking Forward To Acquiring Haldiram’s But The Valuation Is The Trouble Here

In a planned deal that might transform India’s snack food business, the consumer division of Tata Group is in discussions to purchase a sizeable 51% interest in Haldiram’s, the nation’s beloved snack food juggernaut. However, individuals with knowledge of the situation told media that Tata is having trouble accepting Haldiram’s high valuation of $10 billion.

What if Tata cracks the deal with Haldiram’s

According to insiders, Haldiram’s, a well-known brand in India, is also in discussions with private equity groups including Bain Capital over the sale of a 10% interest. If the negotiations are successful, the Indian conglomerate will face up against multinational behemoths like Pepsi and Mukesh Ambani’s Reliance Retail in the country’s brutally competitive consumer sector.

According to sources speaking to media, Tata Consumer Products, the conglomerate’s arm in charge of Tetley, a successful collaboration with Starbucks in India, and other assets, is actively pursuing the desired stake. Despite having indicated interest in buying more than just a 51% ownership, sources claim Tata has informed Haldiram’s that the valuation demand is disproportionately high.

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An intriguing opportunity for Tata

According to the source, the prospective acquisition offers Tata an intriguing opportunity. They continued, “Tata (Consumer) is thought of as a tea firm. Haldiram’s is enormous and dominates the consumer market.”

It’s not the first time a business has expressed interest in the family-run operation. In order to branch out beyond the cereal sector, US-based Kellogg’s expressed interest in purchasing a stake in Haldiram’s in 2019. The talks, however, fell through. General Atlantic, a private equity group, was reportedly interested in purchasing a 10% stake in the food company.

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Haldiram’s was not this huge always…

The small business where Haldiram’s was first established in 1937 is remembered for its delicious “bhujia” snack, which can be purchased for as low as Rs 10 from mom-and-pop shops all around India. According to Euromonitor International, the company has carved out a sizable niche, controlling close to 13% of India’s $6.2 billion savory snack industry.

Pepsi, known for its Lay’s potato chips, likewise has a similar 13% market share in the same niche. Notably, snacks made by Haldiram are also offered in other countries like Singapore and the US. The company operates 150 restaurants that serve regional fare, sweets, and western food.