Temasek acquires nearly 10% stake in Haldiram’s snacks business for US$1 billion

Singapore’s state investment firm, Temasek, has finalised a deal to acquire close to a 10% stake in Haldiram’s snacks business for approximately US$1 billion. The agreement values Haldiram’s at around US$10 billion, marking a significant move in Temasek’s expansion into India’s consumer sector. Two sources with direct knowledge of the deal told Reuters on 13 March 2024 that the investment was concluded after months of negotiations. One of the sources described Haldiram’s as a “prized asset” for Temasek, which has been steadily increasing its presence in India. Temasek declined to comment on the transaction, stating that it does not respond to market speculation. Calls to Haldiram’s CEO Krishan Kumar Chutani went unanswered.

Blackstone withdraws as Haldiram’s attracts global interest

Temasek’s acquisition comes shortly after Blackstone, a leading private equity firm, withdrew from talks to acquire a minority stake in Haldiram’s. Earlier this month, Reuters reported that Blackstone pulled out due to valuation concerns. Haldiram’s, established in the 1930s by Ganga Bishan Agarwal in Bikaner, Rajasthan, has grown into India’s largest snack manufacturer. The company holds an estimated 13% share of India’s US$6.2 billion savoury snacks market, according to Euromonitor International. The company is well known for its wide range of packaged snacks, including its signature product, “bhujia,” a crispy fried snack made from flour, herbs, and spices. Beyond its snacks business, Haldiram’s operates 43 restaurants in and around Delhi and offers frozen meals and baked goods.

Temasek’s growing India investments and potential Haldiram’s IPO

Temasek has been steadily increasing its investments in India, particularly in the consumer, healthcare, and financial services sectors. Over the past two decades, the firm has invested nearly US$37 billion in India. It plans to invest up to US$10 billion more over the next three years, according to Mohit Bhandari, Temasek’s Managing Director for India. The acquisition of a stake in Haldiram’s could also serve as a stepping stone for a potential initial public offering (IPO) of the Indian snack giant. The Agarwal family, which owns Haldiram’s, has reportedly been considering an IPO or the sale of a minority stake to global investors.

India’s rapid economic growth attracts global investors

India has emerged as a prime location for global investment, driven by its rapid economic growth, a booming stock market, and an increasing number of mergers and acquisitions. Temasek has been shifting its focus from China towards India in recent years, reflecting a broader trend among investors. India currently accounts for around 7% of Temasek’s global investments, and the firm intends to increase this proportion. In contrast, around 22% of its portfolio is in the United States and 19% in China. Temasek has largely avoided acquiring majority stakes in Indian firms, preferring to take minority positions and support companies in their growth. On 17 Oct 2024, Temasek signed an agreement to buy a 17–18 per cent stake for US$950 million in VFS Global, a visa application services company, as reported by Mint. This transaction values VFS Global at US$5 billion in equity and US$7 billion in enterprise.