Private equity eyes fresh bite of regional food brands, repeat of Haldiram
Summary
Top private equity firms are scouring the country to unearth cash-rich regional food brands with healthy balance sheets that offer good growth potential, industry experts told Mint . The Nagpur-based snacks maker roped in Alpha Wave Global and Temasek Holdings as investors last month, valuing the company at around $10 billion.According to Pritha Jha, co-founder of Pioneer Legal, a law firm that has helped food brands raise capital, a lot of investment activity in consumer food brands is happening in places like Nashik, Jaipur and Udaipur.For a category like snacks, there is immense scope for scalability," said Jha, adding that sometimes when the next generation doesnt want to take the family business forward, PE firms get more interested. And Jashvik Capital bought a minority stake in Bharuch, Gujarat-based snacks firm Jabsons Foods in December 2022.Also read | Haldirams promoters now offer a smaller bite to investorsThe interest is reflected in the skyrocketing numbers. It also helps that most of the food brands generate a lot of cash and are largely profitable.Such deals have become more prominent as investors are prioritizing unit economics now more than ever," Maheshwari said. Similarly, Advent International acquired Crax-maker DFM Foods in 2019.However, several of these brands continue to remain regional in nature because of ongoing challenges.Bikaji Foods has deep market presence in Rajasthan, Bihar and Assam, but it is susceptible to market risks while expanding beyond these core regions as it faces competition from other local manufacturers as well as established participants, credit rating agency Icra said in March 2024.