Temasek, Singapore's sovereign investment firm, has agreed to buy nearly a 10% stake in India's Haldiram's snacks division for around $1 billion, according to reports.

After months of discussions, the deal was reached. Temasek sees Haldiram's as a very valuable asset that will enable it to concentrate on India's quickly expanding consumer sector. The deal also shows how international investors are becoming more interested in India's food and beverage sector, especially in the savory snack market.

Haldiram's competitive bidding

American private equity (PE) giant Blackstone had also offered a 20% stake, albeit at a lower valuation, but Temasek's bid ultimately closed the deal. The deal, which is among the biggest recent deals in India's fast-moving consumer goods (FMCG) sector, could lead to more foreign investment in the sector.

According to bankers, Haldiram's promoters have been considering an initial public offering (IPO) within the next year, hoping to capitalise on India's booming stock market. If this happens, Haldiram's financial standing and market reach may improve even more.

Haldiram Brand and Market Share

Haldiram Snacks Foods, the combined FMCG business of the Haldiram's Delhi and Nagpur branches, is a major player in India's snack market. In India, the Haldiram brand is run by three separate family-owned businesses in Delhi, Nagpur, and Kolkata.

Market research firm Euromonitor International estimates that the company owns almost 13% of the $6.2 billion savory snack market in India.

To further solidify its position in India's food industry, Haldiram's also runs a chain of restaurants in addition to packaged snacks. Its dominant market position attracted the attention of international investors and a number of private equity firms, including Bain Capital and Blackstone, are vying for a share in the unlisted business.

In fiscal year 2023-24 (FY24), Haldiram Foods International's consolidated net sales were Rs 4,551 crore ($550 million), up 10.9 percent from the year before. In FY24, the company's net profit climbed from Rs 436 crore ($53 million) in FY23 to Rs 597 crore ($72 million).

After the reorganization, current Haldiram Snacks and Haldiram Foods International shareholders now hold 56% and 44% of the combined business, respectively. Following the Temasek transaction, HSFPL will oversee all consumer product operations for the Haldiram group.