Temasek in negotiations for over US$1 billion stake in India’s largest snack maker

SINGAPORE: Temasek Holdings is reportedly in discussions to acquire a minority stake in Haldiram Snacks, India’s largest snack manufacturer.

As reported by Bloomberg news, sources familiar with the matter have indicated that the transaction may value Haldiram at approximately US$11 billion (S$14.3 billion).

The Singapore's sovereign wealth fund is contemplating purchasing between 10 per cent and 15 per cent of the company, which could equate to a stake worth over US$1 billion (S$1.3 billion).

The potential investment could serve as a stepping stone towards an initial public offering (IPO) for Haldiram, though the discussions are still at a preliminary stage and may not culminate in a deal.

The company, also known as Haldiram’s, has attracted interest from various other bidders, underscoring its significant market position.

A representative for Temasek has declined to provide any comments, and Haldiram has not responded immediately to requests for information.

Established by Ganga Bishan Agarwal in the 1930s in northern India, Haldiram's offers an extensive range of products, including sweet and savoury snacks, frozen meals, and breads.

The company also operates 43 restaurants in and around Delhi, as detailed on its website.

The Agarwal family is reportedly considering various options, including a potential sale of the business or an IPO, as noted by Bloomberg News.

The growing interest of global investors in India has been fuelled by the nation’s rapid economic expansion, making it a prime location for significant deal-making.

Over the past two decades, Temasek has invested nearly US$37 billion in India, according to Mr Vishesh Shrivastav, the managing director for India investments at Temasek.

In July, Mohit Bhandari, Temasek’s Managing Director for India, during an interview with Reuters, indicated that Temasek Holdings plans to invest up to US$10 billion (approximately S$13.4 billion) in India over the next three years, with targeted investment areas including financial services and healthcare.

As Temasek becomes more cautious about investing in China, it is leaning towards increasing its investments in India.

India’s economy is growing rapidly, with its stock market near historical highs, and there is a boom in initial public offerings and mergers and acquisitions.

Bhandari stated that India currently accounts for 7% of Temasek’s global investments, and the company intends to increase this proportion.

Approximately 22% of Temasek’s investments are in the US, while 19% are in China. In the last fiscal year, for the first time in a decade, Temasek’s investments in the Americas surpassed those in China.

Temasek has been focusing on acquiring minority stakes in companies, assisting them in their growth, while largely avoiding the trend of securing majority holdings in Indian firms.

Its primary areas of interest include digitisation, consumer trends, and sustainable living.

Notable potential minority investments are said to include VFS Global, which is valued at about US$7 billion, including debt, according to Bloomberg News.