ITC is evaluating the purchase of a 47 percent stake held by Peak XV Partners (formerly Sequoia Capital) in Indore-based foods major Prataap Snacks Ltd, ET reports. ITC’s move comes on the heels of failed talks with Haldiram’s, owing to a valuation mismatch, ET reports. Moneycontrol was the first to report the developments at Prataap Snacks in December 2023, stating that Prataap Snacks promoters were in talks, led by Peak XV, with potential buyers for sale of controlling stake.
Selling nearly 11 million packets every day, PSL is one of India’s leading snack manufacturers and distributors. It operates out of seven owned and eight contract manufacturing facilities, serving over 1.7 million retail touch points in 31 states and UTs. The company’s products include potato chips, extruded snacks and namkeen (traditional Indian snacks) sold under the Yellow Diamond and Avadh brands.
Listed Bikaji Foods, another large snacks company, had also looked at the deal but those negotiations also fizzled out, ET states.
Buyout funds KKR, TA Associates and Apax are among others that have been tapped since Peak XV initiated a plan to fully exit its nearly 13-year-old investment in Prataap and hired Deutsche Bank to sell the company, the report states.
Network18’s Moneycontrol was the first to exclusively report on the promoters of Prataap Snacks Limited (PSL) being in discussions to sell a controlling stake in the listed company.
The December 2023 report stated that negotiations were led by Sequoia capital (now Peak XV), which is part of the promoter group, and owns close to 47 percent of the Indore-based company.
The stake sale could also see the exit of the company’s founders, the Mehta and Kumat families, which control a 22 percent stake.
“A number of bulge bracket private equity funds and large FMCG companies have been approached. However, talks are at an early stage now,” said one of the persons aware of the matter, at the time.
Sequoia Capital first invested in the company in 2011 and has participated in multiple funding rounds since then. In June 2016, domestic private equity firm Faering Capital invested Rs 45 crore in the company.
The company made its public market debut in 2017, listing at a 33 percent premium to the issue price. The stock has since delivered a negative return of around 22 percent. In FY23, the company posted revenue to the tune of Rs 1,660 crore, an increase of around 15 percent over the previous year.
Read More: Haldiram’s to buy snack foods company Prataap Snacks