Tata Consumer looks to snap up 51 percent of Haldiram's, snack maker wants $10 billion valuation

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However, take the case of Haldiram’s listed rival Bikaji Foods International. It’s much smaller than Haldiram’s with revenues of Rs1,980 crore in FY23. Yet, it has a market capitalisation of $1.5 billion, or 6x its annual revenue.  

“Haldiram’s is a much larger company. In the FMCG space, a larger company is seen as superior to the smaller company because of the better reach and distribution that a larger company has. So, it will definitely command a premium valuation,” says one analyst who covers the sector.  

A view shows packets of snacks on the shelves inside a Haldiram's restaurant in Mumbai, India, September 6, 2023. Image: REUTERS/M. Sriram

Founded in 1937, Haldiram’s is one of the oldest names in the packaged food space in India. The family-run business has largely remained in the mass retail space selling its popular ‘bhujia’ snack, for example, for as little as Rs10. The strategy has led Haldiram’s to capture almost 13 percent share of India’s $6.2 billion savoury snack market, according to Euromonitor International. Pepsi, famous for its Lay’s chips, also has around 13 percent.  

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"If you look at the history of Haldiram’s, its footprint, and the visibility it has not just in India but also internationally with the diaspora, it’s clear that it’s a great brand. And it’s in a growing category. It can be an excellent growth engine across multiple markets for TCPL,” says Devganshu Dutta, chief executive of Third Eyesight, a management consulting firm.  

TCPL reported revenue of Rs13,783 crore in FY23. Its retail footprint spans 1.5 million direct outlets—3x from 0.5 million in 2020. “TCPL has been aggressive in expanding both organically and inorganically since Sunil D’Souza took over as CEO three years ago,” says the analyst.   

Take the case of breakfast cereal maker Soulfull, which TCPL bought for Rs156 crore in February 2021. From being available in 15,000 outlets, the product is now available in 150,000 outlets, a 10x jump. The brand uses traditional Indian millets as its hero ingredient; to that end, TCPL has added new snacking options to the brand such as No Maida Ragi Choco Bites. It’s similarly launched multiple variations of Tata Tea and Tata Salt to cater to different consumer needs.  

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“The Haldiram’s deal—if it goes through—is in line with TCPL’s strategy of going bigger and deeper in the FMCG space. The acquisition will significantly increase TCPL’s reach,” adds the analyst.  

But competition is heating up in the consumer goods segment. Reliance Retail, for example, is also aggressively ramping up its FMCG presence. It launched a staples and groceries brand called ‘Independence’ recently and acquired a clutch of companies, including carbonated drinks brand Campa Cola, Sosyo beverages, and confectionary brand Lotus Chocolates.  

“One only needs to worry about competition if the market is saturated. But that is not the case in India. The market is growing, and has enormous headroom to keep growing, especially the packaged food segment—there is space for smaller as well as larger players,” says Dutta.   

In the recent past, there were multiple media reports about TCPL buying Bisleri, the storied bottled water company. But the deal didn’t go through. “So, until a formal announcement is made by TCPL and Haldiram’s, it’s still early days and it’s better not to speculate,” says the analyst. “What I can say with certainty, though, is that TCPL will have a very different portfolio three to five years down the line.”