Tata Consumer eyes majority stake in Haldiram's; $10 billion valuation poses challenge: Report

As per a Reuters report Tata Consumer Products Ltd, a subsidiary of the Tata Group, is reportedly in discussions to acquire a majority stake in the renowned snack maker, Haldiram's. However, negotiations have hit a snag due to a valuation gap.

Haldiram's, a household name in India and a dominant player in the savory snack market, has been seeking a valuation of $10 billion for the proposed stake sale. Tata Consumer is looking to purchase more than 51% of Haldiram's, but it appears that the valuation demand has left them uncomfortable, reported Reuters quoting sources.

If the deal successfully materializes, it will not only mark Tata Consumer's foray into the fiercely competitive snack food sector but also pit them against global giants like Pepsi and Reliance Retail, owned by billionaire Mukesh Ambani.

In addition to discussions with Tata Consumer, Haldiram's is reportedly exploring the possibility of selling a 10% stake to private equity firms, including Bain Capital, as per Reuters.

Tata Consumer Products Ltd, known for its ownership of the UK tea company Tetley and a partnership with Starbucks in India, is strategically considering the purchase of Haldiram's stake to diversify its portfolio.

While neither Tata Consumer nor Haldiram's has officially commented on the ongoing talks, sources close to the matter suggest that Tata is keen on acquiring a more substantial share but is cautious about the valuation.

Haldiram's, a family-run business dating back to its inception in 1937, is renowned for its delectable "bhujia" snack, which is widely available across small local stores at an affordable price. The company holds nearly 13% of India's $6.2 billion savory snack market, on par with global giant Pepsi, famous for its Lay's chips.

Furthermore, Haldiram's snacks have found their way into international markets such as Singapore and the United States, extending their global reach. The company also operates approximately 150 restaurants that offer a diverse range of local and Western cuisine, contributing to its widespread popularity.