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This deal, being labeled as a pre-IPO initiative, is expected to unlock significant value for Haldiram Snacks Foods in the coming years.

After over 18 months of prolonged and intense negotiations, Singapore-based global investment firm Temasek has edged ahead of other private equity players to emerge as the frontrunner in acquiring a minority stake in Haldiram Snacks Foods Private Ltd. The Indian multinational’s combined FMCG business is owned by the Delhi and Nagpur branches of the Haldiram family, according to Moneycontrol report.

Key Developments in the Deal

Term Sheet Signed: A term sheet, a non-binding agreement outlining the principal terms and conditions of the proposed investment, has been signed between Temasek and the promoters of Haldiram Snacks.

Pre-IPO Valuation Benchmark: Temasek is expected to acquire less than 10% stake in the company at a valuation of $10 billion to $11 billion (₹85,700 crore to ₹94,270 crore). This transaction is anticipated to set a valuation benchmark for Haldiram Snacks ahead of a potential IPO.

Targeted Finalization by February: While the deal has progressed slowly, significant groundwork has been laid since December. The Haldiram family members are reportedly aligned, and efforts are underway to finalize agreements by February 2025.

Scope for Additional Stake Sales

The same report also revealed that while the current focus is on Temasek’s minority acquisition, the promoters may consider selling additional stakes to other private equity players, including Blackstone and Alpha Wave Global, who were also part of the final bidding process.

Haldiram Snacks Stake Deal

Early-stage discussions involved the sale of a majority or controlling stake. However, the transaction later pivoted to a partial stake sale. To facilitate this deal, Haldiram Snacks Private Ltd (Haldiram Delhi group) and Haldiram Foods International Pvt Ltd (Haldiram Nagpur group) demerged their FMCG businesses, creating a unified entity, Haldiram Snacks Foods Private Ltd (HSFPL). Post-demerger, shareholders from the Delhi group hold 56% in HSFPL, while the Nagpur group holds 44%.

Haldiram Group’s Market Presence

Haldiram is a leader in India’s snacks and FMCG market with a diversified product portfolio including, Snacks, namkeen, and sweets, ready-to-eat/pre-mix food, frozen food, biscuits and non-carbonated beverages and pasta. The group also exports extensively to regions such as the USA and Europe, complementing its strong domestic presence.

Shares of Haldiram’s smaller listed peer, Bikaji Foods International, have seen a rise of over 25% in the past year, with its market capitalization standing at Rs 18,230 crore as of January 6, 2025.