Private equity giant Temasek is set to acquire nearly a 10% stake in Haldiram Snacks for approximately ₹8,600 crore (around $1 billion). This landmark transaction stands out as the largest private equity investment in India’s consumer sector, placing Haldirams’ valuation at ₹86,000 crore (approximately $10 billion).

Investment Highlights

A spokesperson for Haldirams expressed enthusiasm about the partnership, stating, “We are eager to collaborate with Temasek to leverage their extensive consumer market experience, which will help us accelerate our growth and adapt to changing consumer preferences.” The financial advisory for this significant deal was provided exclusively by PwC’s Investment Banking team, with Khaitan & Co handling the legal aspects.

• Total Investment: ₹8,600 crore ($1 billion)
• Company Valuation: ₹86,000 crore ($10 billion)
• Advisors: PwC (financial), Khaitan & Co (legal)

Business Expansion Plans

The Agarwal family, which oversees Haldiram, is currently merging its New Delhi and Nagpur operations, having received clearance from the Competition Commission of India (CCI) last year. Recent regulatory filings revealed that Haldirams generated ₹12,800 crore in revenue and recorded a net profit of ₹1,400 crore in the fiscal year 2024. Haldirams occupies a commanding position in India’s snack market, boasting an estimated 13% market share in a sector valued at ₹45,000 crore.

According to industry insiders, Haldirams is poised to sell an additional 5-6% stake to another investor shortly. This forthcoming transaction is anticipated to also value the company at ₹86,000 crore, with a deal size nearing ₹5,000 crore. The funds raised, totaling around ₹13,000 crore from both investments, are expected to fuel further business development.

Negotiation Insights

The Temasek agreement, revealed on Sunday, concludes months of discussions between the Agarwal family and the Singaporean firm. Temasek initially showed interest in acquiring a more substantial stake last year, competing against other prominent firms like Bain Capital and Blackstone. However, valuation concerns led the negotiations to settle for a 10% stake, with Temasek securing a position on Haldirams’ board and indicating plans to potentially increase its investment in the future.

Temasek’s Broader Strategy

As of March 2024, Temasek reportedly holds a $37 billion investment portfolio in India. The firm is diversifying its investments beyond Haldirams, having previously acquired a 51% stake in Manipal Health following a $2 billion investment and led a $210 million funding round for Rebel Foods. Temasek’s interest in the snack sector underscores its belief in the market’s robust growth potential, with projections indicating that the domestic snack market could exceed ₹90,000 crore within the next decade, driven by both regional and national brands.

This strategic acquisition not only underscores Temasek’s commitment to tapping into India’s expanding consumer market but also highlights the promising future of Haldiram Snacks as it seeks to innovate and grow within this dynamic sector.