ITC and PepsiCo Bhujia Namkeen company Balaji wanted to buy a stake in Balaji Wafres, a big FMCG sector company in the country. Apart from this, a large private equity firms like TPG and Temasake are also preparing for 10% stake in Balaji Wafres, which has an expected valuation of about Rs 40,000 crore.
According to the ET report, a big company like PepsiCo is trying to buy a stake in Balaji Wafres. For this, she is working closely with strategic investors and private equity firms. Some investors want more than 10% stake but the talks are in the initial stages. This is the second time of PepsiCo, because in 2013 also he tried to buy a share in Balaji. At that time PepsiCo wanted 49-51% stake, but the owner of Balaji, the Virani family was not ready for it. Demand of regional brands is increasing in the snack market in India, which are competing with big companies. Recently, global investors in Haldiram snacks in March bought a 10% stake on valuations of over $ 10 billion, which is the biggest deal ever in the packaged food sector.
Demand for small brands increased
ITC’s snack brand Bingo is getting a tough competition from big companies and regional brands. Bingo, the rest of the ITC brands such as blessings are a smaller brand than flour and Sunfast biscuits. On the other hand, PepsiCo, which is a leader in western snacks like Chips and Nachos, is losing market share from regional brands in traditional snacks. A person associated with the case said that the snack market has now completely changed, and the small brands are reunited. PepsiCo will get strengthened in the local market and will also benefit in production by alliance with regional brands like Balaji.
Balaji’s increased earnings
PepsiCo is now focusing on snacks. Its soft drink business, such as Pepsi, Mountain Dew, Slice and Tropicana, manages most of the franchise partner Varun Beverages. Balaji Wafres earned a revenue of Rs 5,453.7 crore in FY 24, which is 11% more than the previous year. The company’s post -tax profit increased by 41% to Rs 578.8 crore.
The Virani family is now thinking of making business more professional. They want to improve the operations and are considering handing over the daily work to professional managers. Recently, on 9 September, Vadilal Industries appointed the first non-family CEO, Himanshu Kanwar. He re-organized the business so that ownership and management could be separated. According to the market researcher IMark Group, in 2023, India’s snack market was Rs 42,694.9 crore, which could double to Rs 95,521.8 crore by 2032.