Tata Consumer in Talks for 51% Stake in Haldiram's at $10 Billion Valuation

Tata Group's consumer division is currently in negotiations to acquire a minimum 51% stake in the renowned snack manufacturer Haldiram's.

However, the report released on Wednesday indicates that Tata is expressing hesitation regarding the requested valuation of $10 billion.

If the negotiations result in an agreement, the Indian conglomerate would enter direct competition with Pepsi and Reliance Retail, led by billionaire Mukesh Ambani.

According to sources cited by Reuters, Haldiram's, a well-known brand in Indian households, is exploring discussions with private equity firms such as Bain Capital regarding the potential sale of a 10% ownership stake.

The report states that Tata Consumer Products Ltd, the owner of the UK tea brand Tetley and in collaboration with Starbucks in India, is currently in discussions regarding the acquisition of the stake.

According to a source cited in the report, Tata expressed interest in acquiring more than 51% of the stake but has conveyed to Haldiram's that their asking price is exceptionally high.

The source mentioned that this potential acquisition presents an attractive prospect for Tata, highlighting that Tata Consumer is primarily recognized as a tea company, while Haldiram's holds significant prominence in the consumer sector and boasts a substantial market share.

Tata Consumer conveyed to BSE and NSE that they will make necessary announcements in accordance with the obligations specified in SEBI (LODR) Regulations, 2015, whenever such a requirement arises.

Tata Consumer clarified in a stock exchange filing that they are not currently engaged in negotiations, as indicated in the mentioned news article.

They stated that they have no undisclosed information requiring disclosure under Regulation 30 of the SEBI (LODR) Regulations, 2015. The article in question has no impact on the company.

Additionally, Tata Consumer mentioned that they continuously assess various strategic growth opportunities for their business and will make necessary announcements in compliance with SEBI (LODR) Regulations, 2015, when such requirements arise.

Haldiram's, a family-owned business, can trace its roots to a small shop established in 1937. The company is renowned for its popular "bhujia" snack, which is crispy and available for as low as Rs 10 in neighborhood convenience stores.

According to Euromonitor International, Haldiram's holds a nearly 13% share of India's savory snack market, which is valued at $6.2 billion. Similarly, Pepsi, known for its Lay's chips, also commands a share of approximately 13% in this market.

Haldiram's snacks are available in international markets such as Singapore and the United States.

 In addition, the company operates approximately 150 restaurants that offer a diverse range of local dishes, sweets, and Western cuisine.

Haldiram's is seeking a $10 billion valuation for the deal, which is equivalent to 6.6 times its annual revenue of $1.5 billion, as per Reuters.

The family-owned Haldiram's has its roots in a small shop founded in 1937 and is renowned for its affordable "bhujia" snack, priced as low as Rs 10 and available in local convenience stores.

According to Euromonitor International, it holds a nearly 13% share of India's $6.2 billion savory snack market, a figure comparable to Pepsi, renowned for its Lay's chips.

Haldiram's snacks are distributed in international markets such as Singapore and the United States. Additionally, the company operates approximately 150 restaurants that offer a wide range of local dishes, sweets, and Western cuisine.

Acquiring Haldiram's would represent a substantial expansion of Tata's consumer products presence.