Haldiram’s, a well-known Indian snack company, is in exploratory talks to purchase a majority stake in Prataap Snacks, a publicly traded competitor worth $350 million. The goal is to increase Haldiram’s presence in the lucrative potato chip sector. Although the talks are in the early stages and no exact valuation has been established, Haldiram’s hopes to acquire a majority ownership of at least 51%. Peak XV Partners, the venture capital group that owns around 47% of Prataap Snacks, is apparently looking to sell their whole interest.
Prataap Snacks is primarily known for its iconic Yellow Diamond chips, which compete in a market dominated by local, unorganised dealers. The company made its stock market debut in 2017 and had annual revenues of around $200 million last year. Despite its presence, Prataap faces issues in a price-sensitive market, with its stock price remaining close to its 2017 debut price.
Haldiram’s, a family-run firm founded in 1937, is a major participant in the packaged snacks sector, with a sales of more than $1 billion and 150 restaurants around the country. Haldiram’s possible acquisition represents a strategic move to enter the potato chips industry, capitalising on consumer demand for Western-flavored snacks.
As Prataap Snacks has 14 manufacturing sites in nine Indian states, smaller, unorganised enterprises dominate the fried snacks market. However, branded items have grown significantly in recent years as customers become more health-conscious and have more disposable income to spend on packaged foods.
According to Prataap’s November earnings report, the Indian snacks market is expected to be valued $5.2 billion, with a 14% annual growth rate. If the transaction is successful, it has the potential to transform the snacks market landscape by giving Haldiram’s a considerable lead in the potato chips category and enabling an exit route for Prataap’s founders and Peak XV Partners in the face of industry headwinds. Both corporations have declined to comment on the current conversations.