Eye on expansion, Haldiram family to invest Rs 2,500 crore in 5 years

Mulls IPO upon the merger of Noida, Nagpur businesses

Haldiram Snacks of Noida and Haldiram Foods International, headquartered in Nagpur (Haldiram’s Nagpur), are in the process of merger. Upon merger, the combined entity may also consider raising capital via an initial public offering (IPO).

The merged entity will also invest Rs 2,000 crore-Rs 2,500 crore, after the fundraising exercise, over the next five-six years to expand its capacity.

“We don't have a concrete dialogue going on for listing at this point. We are thinking about an IPO to explore the value within the organisation. Apart from that, we are open to listening to external investors and we are always welcome to suggestions,” Avin Agrarwal, director, Haldiram Foods, told Business Standard.

He further said: “We are not looking to raise capital to just get cash. If at all we raise capital, that would be to expand. But right now, whatever we are doing is with internal accruals.”

About the merger of the two businesses, Agrawal said the move is because of increased competition in the segment and that it will be easier to fight off competition as a combined entity. He said the merger will be over this year itself.

At this point, only the snacks and sweets verticals of both businesses are in the process of merger; the restaurant part of both entities will be merged on a later date.

According to Haldiram’s Nagpur, which expects to report Rs 3,500 crore in revenues for FY23, its snacks part of the business is growing at 13 per cent, while the snacking industry is growing at 20 per cent. The sweets segment of Haldiram’s Nagpur is growing at a higher pace of 25 per cent.

Agrawal said that the revenue is growing at 22 per cent year-on-year.

According to Capitaline data, Haldiram Snacks saw its consolidated revenue at Rs 5,195 crore in FY22.

In the traditional namkeens segment, the combined entity has a market share of 50 per cent and in the organised space, it has a market share of 60 per cent.

“We are entering a lot of new markets in terms of snacking, as well. The snacking industry is growing at approximately 20 per cent. We hope to catch that trend,” Agrawal said.

Agrawal is also looking to expand the beverages business and has plans to expand into the HoReCa (hotels, restaurants and catering) channel.

Of the four brothers from the Agrawal family, one runs Bikaji Foods, which is a separate company run from Bikaner and got listed on bourses last year.