October 14, 2024

Blackstone Engages in Negotiations for Stake in Haldiram’s Amid Valuation

The Entrepreneur Bytes Team July 8, 2024 282

Global private equity firm Blackstone, along with its consortium partners Abu Dhabi Investment Authority and Singapore’s GIC, has been in negotiations for several months to acquire a significant stake in Haldiram’s, the renowned Indian snack company. The discussions, however, have faced delays due to valuation disagreements with members of the Agrawal family, who own the company.

Blackstone in Advanced Talks to Acquire Major Stake in Haldiram's Amid Valuation Disputes
Blackstone in Advanced Talks to Acquire Major Stake in Haldiram's Amid Valuation Disputes

Global private equity firm Blackstone, along with its consortium partners Abu Dhabi Investment Authority and Singapore’s GIC, has been in negotiations for several months to acquire a significant stake in Haldiram’s, the renowned Indian snack company. The discussions, however, have faced delays due to valuation disagreements with members of the Agrawal family, who own the company.

Sources familiar with the matter revealed that differences over the business’s valuation have been a major hurdle. “There has been a lot of back and forth with the family members over the valuation of the business. Also, the family is not looking at giving away a 76 percent controlling stake, which the private equity investors wanted, and want to retain a larger share of the business,” said one source. Some family members prefer selling only a 51 percent stake. Current discussions are leaning towards a stake sale closer to 74 percent.

Last month, Bloomberg reported that the Agrawal family was considering a public listing for Haldiram’s after bids from private equity investors, including Bain & Co. and Temasek Holdings, fell short of expectations. This consideration came as a strategic alternative to selling a controlling stake to private equity firms.

Haldiram’s is divided into two main entities based on geographic operations. The Delhi-based Haldiram Snacks Pvt Ltd, which derives 85% of its revenue from its FMCG business and 15% from its restaurant business, reported revenue of ₹6,377 crore and a profit of ₹593 crore for the fiscal year 2023. Meanwhile, the Nagpur-based Haldiram Foods International Pvt Ltd reported revenue of ₹5,974 crore and a profit of ₹794 crore for the same period, according to Crisil.

Despite the initial delays, the talks have gained momentum in recent weeks. A source indicated, “The current discussions with Blackstone are likely to see a stake sale of closer to 74 percent.” This movement suggests that both parties are working towards a compromise to finalize the deal.

As Blackstone and its partners push for a significant investment in Haldiram’s, the Agrawal family is weighing their options between a substantial private equity deal and a potential public listing. The outcome of these negotiations could significantly impact the future direction of Haldiram’s, a staple brand in the Indian snack industry.

Sources By Agencies

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