In what stands to be one of the most hotly anticipated food investment deals, Times of India has quoted people close to the development as claiming that Capital International, Everstone Capital, General Atlantic Partners, WestBridge Capital and TA Associates are among the PE companies with an interest in gaining a minority stake in the business.
The deal, possibly combining the Nagpur and Delhi branches of the company would likely value Haldiram’s at around US$1bn if it goes ahead.
Haldiram’s, which exports to Europe and North America, as well as countries in Asia-Pacific, is run by the Agarwal family. The business was split into three geographic regions in the 1990s, around 60 years after Gangabhisan Bhujiawala Agarwal opened his first shop in Rajasthan. Over the last two decades, the company has witnessed strong growth and is among India’s most visible food brands.
“A 15-20 times on operating profit and three-four times on top line revenue may be a reasonable valuation," a banker familiar with the fund-raising process told Times of India.
Nagpur and Delhi are the strongest of Haldiram’s three operations and account for three-quarters of its business. They also control the Haldiram's trademark while the Kolkata business runs operations mostly within West Bengal.
Food brands are seen as tempting to private equity firms who view strong consumption among a growing middle-class as a good recipe for profits. However, the prevalence of family-owned businesses within the segment has made it difficult for investors to persuade owners to relinquish control of their generations-old businesses.
Illustrating this, Capital International came close to investing in a 15% stake of Balaji Wafers in 2014, but family disputes blocked the deal. Earlier this year, the snack food company revealed it was planning a straightforward IPO to sell a 10% stake.
More stories from South Asia…
Swiggy claims a million orders amid testing times for food delivery start-ups
Indian online food delivery platform Swiggy claimed delivery of 1m orders for the first time in April from a network of more than 6,300 restaurants in eight cities.
The company, which raised Series C funding of US$35m in January, handled an average of 35,500 orders per day, and continues to grow at 25% monthly.
Swiggy is the only food ordering platform in India with its own fleet of delivery personnel. It also enjoys high customer loyalty with many customers ordering from the platform more than 4-6 times a month.
The news comes at a difficult time for Indian food delivery start-ups. Last month, HSBC analysts valued Zomato, an Indian competitor that has been feverishly expanding into new markets, at US$500m—about 50% lower than the valuation from its last round of funding in 2015, though the food discovery and delivery app refuted the analysts’ findings.
Last December, Foodpanda, another expansionist, laid off some 300 employees and was reportedly looking for buyers.
"Clocking one million orders validates the capabilities we have built to offer the best customer experience in food delivery,” said Nandan Reddy, Swiggy’s co-founder.
“We are also happy to note that conservative markets such as Chennai and Kolkata have been warming up to Swiggy over the past few months, while we have seen significant growth in Mumbai, Pune and NCR.”
Givaudan opens offices and lab in Karachi
Givaudan has laid claim to being the first global flavours company to establish a laboratory and offices in Pakistan with the opening of an 800-square-metre facility in Karachi.
Through it, the Swiss-based company hopes to strengthen its capabilities in the country by offering flavour application services across all segments with a strong focus on sweet goods and beverages.
“This investment reflects Pakistan’s importance to Givaudan and our commitment to further expand our existing market-leading position,” said Gilles Andrier, chief executive.
“With a population of 200m and strong growth potential, Pakistan fits with our overall 2020 strategy of investment in high growth markets.”
The offices will provide customers with a faster response to requirements for fully halal-compliant international flavour profiles, as well access to training for local technologists and manufacturers.