Snack Industry Shake-Up: Tata's Interest in Haldiram's Sparks Market Speculation

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Tata Consumer Products experienced a 1.87 percent decline to Rs 862.5 at 9.20 am on September 7, following the company's refutation of news reports suggesting it was engaged in discussions regarding the acquisition of a stake in Haldiram's, an Indian food snack chain. The stock had previously surged by over 4 percent in the preceding session, driven by the initial report of Tata Consumer Products' interest in Haldiram's.

On September 6, Reuters reported that Tata Consumer Products was in discussions to acquire a minimum of 51 percent of Haldiram's. However, it was noted that the company was uncomfortable with the proposed $10 billion valuation. Tata Consumer Products promptly issued a statement through an exchange filing, explicitly denying the accuracy of the news article. Haldiram's also refuted the same claim on CNBC-TV18.

Simultaneously, Haldiram's was reportedly in negotiations with Bain to potentially divest a 10 percent stake in the company. Haldiram's, however, explicitly denied any intention of being up for sale.

Tata Group's consumer division was indeed in discussions to secure a majority stake in Haldiram's, according to sources familiar with the matter. Nevertheless, the $10 billion valuation posed challenges for Tata, who wanted to acquire more than 51 percent of the company. These discussions held significant implications, potentially pitting Tata Consumer Products against industry giants like Pepsi and Reliance Retail, owned by billionaire Mukesh Ambani.

Haldiram's, a well-recognized brand in India, began as a modest shop in 1937 and is particularly famous for its affordable "bhujia" snack, available for as little as 10 rupees in local stores. It commands a substantial 13% share of India's $6.2 billion savory snack market, a figure on par with Pepsi's Lay's chips. Haldiram's snacks are also distributed in international markets such as Singapore and the United States. Additionally, the company operates approximately 150 restaurants offering a diverse range of local and Western cuisine alongside traditional sweets.

It's worth noting that Tata Consumer Products refrained from commenting on market speculations, and neither Haldiram's CEO Krishan Kumar Chutani nor Bain Capital provided official statements regarding the matter.