Daal me kuch kaala! Is Blackstone acquiring majority stake in Haldiram’s for Rs 40,000 crore?

Haldiram’s is India’s one of the most-loved companies when it comes to snacks, as well as sweets. The brand’s name is synonymous with reliability and has a sense of nostalgia. It ranks 158th among India’s most trusted brands, as per Trust Research Advisory. But, a few years ago, the US Food and Drug Administration (FDA) banned the import of Haldiram's snacks due to alleged food safety violations.

Now, as per media reports, an American brand is preparing to take a majority stake of 51% in this legacy food and beverage brand from India. Earlier this month, Moneycontrol reported that NYC-based investment management company Blackstone might acquire a controlling stake in the company.

Rebuilding the legacy of Haldiram's

In May, an Economic Times report claimed that 76% of the company could be acquired by Blackstone. However, latest reports say that Blackstone has revised the offer and might get only a 51% stake in the snacks company.

A recent report in Moneycontrol says that Blackstone is expected to bid a whopping Rs 40,000 crore for 51% stake in the company. This strategic investment also marks Blackstone's ambitious entry into the burgeoning Indian snack market. If the deal goes through, Haldiram's could be valued at around Rs 70,000 to Rs 78,000 crore.

Earlier this year, Blackstone had expressed its intention to invest over $2 billion annually in India, owing to the increasing ‘ease of doing business’ in the country.

“Blackstone only buys what we can build; we’re always looking for opportunities to make companies better. Even before we make an investment, we have a plan for how to build the business, so that what we buy is not what we sell,” Blackstone’s Head of Asia for Private Equity Amit Dixit had said in 2022.

Key details of potential acquisition

The Moneycontrol report also adds that the deal has been in the works for several months, with numerous hurdles along the way. Key issues, such as the ownership of Haldiram's restaurants and the brand licence, have now been resolved, paving the way for the finalisation of the transaction. Sources told Moneycontrol that these contentious points had previously stretched negotiations, but with their resolution, the deal is expected to close imminently, barring any unforeseen regulatory hurdles.

Blackstone's investment might grant the firm controlling power and a perpetual licence for Haldiram's product business, a significant advantage as it steps into India's lucrative food sector. The Haldiram family, however, is likely to retain rights to the restaurant operations and will receive an annual royalty for the use of the brand. This arrangement ensures that the family's legacy and operational control over their restaurant ventures remain intact, while Blackstone focuses on expanding the product business.

This acquisition is more than just a financial transaction; it represents a strategic manoeuvre by Blackstone to capitalise on the growing demand for packaged snacks in India. The Indian snack market has been experiencing rapid growth, driven by changing consumer lifestyles and increasing disposable incomes. By acquiring a controlling stake in Haldiram's, Blackstone is set to leverage the brand's strong market presence and expand its footprint in the fast-growing sector.

According to data by market research company IMARC Group, the Indian snacks market stood at Rs 42,694.9 crore in 2023, and is expected to reach Rs 95,521.8 crore by 2032, with a staggering CAGR of 9.08%. As Blackstone prepares to close this deal, all eyes will be on how the partnership will unfold and the impact it will have on Haldiram's future.