INDIA – Authum Investment & Infrastructure and institutional investor Mahi Madhusudan Kela announced their acquisition of a 46.85% minority stake in Prataap Snacks, a prominent Indian snack manufacturer known for its Yellow Diamond brand.
This strategic move is valued at approximately ₹846.6 crore (approximately US$101 million) and marks a significant shift in ownership for the Indore-based company.
The acquisition involves purchasing shares from Peak XV Partners, a private equity firm previously known as Sequoia Capital India.
After this transaction, Authum will hold a 42.31% stake in Prataap Snacks, enhancing its influence over its operations and future direction.
“This acquisition aligns with our long-term strategy of diversifying our portfolio while investing in sectors that demonstrate both stability and growth potential,” stated Authum Investment in a regulatory filing.
The firm aims to nurture and expand Prataap Snacks, maximizing value creation for all stakeholders.
In addition to the initial purchase, Authum and Kela have initiated an open-market offer to acquire an additional 26% stake at ₹864 per share (US$10.3).
This offer is designed to attract existing shareholders and is expected to consolidate their position within the company further.
The open offer price represents a discount compared to recent trading prices, reflecting market conditions and investor sentiment.
Since its inception in 1987, Prataap Snacks has established itself as a key player in the Indian snack food industry.
The company produces various products, including traditional Namkeen snacks, potato chips, and other savory items.
Under the leadership of CEO Amit Kumat, Prataap Snacks has expanded its reach across India, supplying products to 23 of the 28 states and several union territories.
This acquisition comes amid a wave of activity within the Indian snacks sector. In August 2024, Bikaji Foods acquired a 55% stake in Ariba Foods for ₹604.9 million (US$7.2 million), indicating robust investor interest in snack food companies.
Ariba Foods specializes in Indian snacks and sweets and is also based in Indore, showcasing the region’s growing prominence in the food industry.
Despite recent fluctuations in share prices, Prataap Snacks experienced a notable surge of approximately 20% on the day following the deal’s announcement.
However, it remains to be seen how this acquisition will impact its overall performance for the year, as shares have declined by about 4.5% thus far in 2024.
The completion of this transaction is anticipated within six months, contingent upon meeting regulatory requirements and other conditions precedent.
As Prataap Snacks transitions into an associate company of Authum Investment, stakeholders are keenly observing how this partnership will shape the future of one of India’s leading snack brands.
In conclusion, this acquisition signifies a pivotal moment for Prataap Snacks and highlights investors’ increasing interest in India’s snack food market.
With strategic investments aimed at expansion and value creation, both Authum Investment and Mahi Madhusudan Kela are poised to play influential roles in guiding Prataap Snacks toward sustained growth and success in an evolving industry landscape.
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