Balaji Wafers not to sell more than 15-20% stake

Aim of stake sale is to raise funds for future expansion in next 2-3 years

Amid speculation of a substantial stake sale, Rajkot-based Balaji Wafers private limited seems to be not very keen to sell more than 15-20 per cent stake of the company.

Balaji plans to raise funds for future expansion which includes setting up manufacturing plants with an investment of around Rs 200 crore over the next two to three years. The company, a major player in western India, is also eyeing entry into the northern and southern markets.

Balaji Wafers clocked a turnover of around Rs 1100 crore during 2012-13 and is eying a turnover of Rs 1500 crore for the current fiscal. According to market sources the valuation of the company is around Rs 4,000 crore.

Balaji plans to use the funds raised through the stake sale to set up manufacturing facilities in key locations that would facilitate its entry into northern and southern markets. The estimated investment on the facilities is around Rs 200 crore.

"We are now planning to enter North and South India market within next two years and for that we are looking to have strategic partnerships with local players", said Keyur Virani, director of Balaji Wafers. Keyur is the nephew of Balaji Wafers' managing director Chandubhai Virani. Chandubhai's son Pranay Virani is also on the Board of Directors of the company.

Keyur, who is looking after all matters related to the stake sale plan, said, "We are in talks with various players to sell our stake, but it will not be more than 15-20 per cent. Even in the future we will not sell stake to the extent that it loosens the hold of the Virani family over the company."

He further added that through the stake sale the promoters are actually trying to create a better management for Balaji Wafers.

"We are financially sound, and we will only tie up with a company or a private equity (PE) player which will understand the nature of the company. The Virani family will never let down their involvements in Balaji Wafers," Virani said.

Balaji has hired Ernst and Young to find suitable investors and so far around 15-20 investors have shown interest.

Chandubhai Virani too said, "It is not true that we are going to sell 49 per cent stake in the company and we have also not received offers for that much. Final decision will be taken by our management."

He further added that while several offers have come already, but things are still in a very early stage. "We have not met any company or PE investor regarding this," he said adding that Balaji has not received any offers from ITC and Britannia.

When asked about the valuation of the company, Chandubhai said, "For me Balaji is priceless," showing his involvement and attachment with Balaji Wafers.