High valuation amid mkt fall delays Haldiram deal; Blackstone exits race

A sharp decline in Indian equities has delayed the planned stake sale in Haldiram, a major food conglomerate, as prospective buyers seek to renegotiate terms on the valuation of the group. 

Blackstone, an American private-equity firm, has backed off, citing a high valuation, according to bankers. 

Singapore-based Temasek was in advanced talks to buy 10 per cent in the company at a valuation of $10-11 billion. But a 15 per cent fall in the BSE Sensex and a 15.6 per cent drop in the Nifty 50 over the past six months, coupled with slowing consumption, have made buyers wary. 

Another source in the know said the profitability of the food company had been under pressure owing to rising commodity prices, which has had an impact on valuations. 

“This is now a buyer’s market,” said an investment banker. 

“The market rout and the rupee’s depreciation have depressed valuations across the board.” 

In the first two months of calendar 2025, transactions on mergers and acquisitions were up 17.75 per cent in value terms to $14.73 billion due to such deals in renewable energy. 

In the December 2024 quarter, most consumer-facing companies in sectors such as automobiles, consumer durables and consumer staples, real estate, and retail reported a margin contraction on a year-on-year basis. 

Haldiram did not comment on email queries. Blackstone and Temasek too declined to comment.

 

The promoters of Haldiram were earlier in talks with several players, including the Tata group, in the last two years to sell part of their stake. Sources in private-equity firms say several offers were made in the past few months for a complete takeover but the promoters wanted to retain control of the company and hence only a minority stake was offered by the family as a deal before the initial public offering.

 

In September 2023, Tata Consumer Products was in talks to acquire 51 per cent in Haldiram but the high valuation the promoters sought was a deterrent, according to a Reuters report.

 

Haldiram also explored negotiations with private-equity firms such as Bain Capital but was unable to make significant progress.

 

Bankers said some of the family members were divided over the extent of stake sale.

 

The promoter, the Agrawal family, operates three separate entities under the Haldiram rubric in the country, with the Delhi, Nagpur, and Kolkata branches running independent businesses.

 

However, the Delhi and Nagpur families joined forces to merge the fast-moving consumer goods businesses of Haldiram Foods International Pvt Ltd (HFIPL) and Haldiram Snacks Pvt Ltd (HSPL), part of the Haldiram Delhi group, into a newly incorporated entity, Haldiram Snacks Foods Private Ltd (HSFPL), which has been put on the market.

 

Under the merger terms, existing shareholders of HSPL (Delhi) and HFIPL (Nagpur) will hold 56 per cent and 44 per cent, respectively, in the new entity.

 

After the transaction, HSFPL would oversee the consumer-product operations of the entire Haldiram group. The restaurant business was hived off into a separate company and is not being sold.

 

In the Rs 19,300 crore ethnic savoury and western snacks market, the Haldiram outfits (Delhi and Nagpur) lead with a 36 per cent market share, according to a report by Frost & Sullivan.

 

The segment is witnessing increasing competition from multinationals like Pepsi and Indian companies.

 

In FY23, HSPL reported revenue at Rs 6,375 crore as against Rs 5,195 crore in FY22 on a consolidated basis while its net profit was up 74 per cent to Rs 593 crore in FY23.  

 

HFIPL’s consolidated net sales were at Rs 4,551 crore, up 10.9 per cent in FY24, and its net profit stood at Rs 597 crore as against Rs 436 crore in FY23.