Will it be strategically-sound deal for Tata Consumers to buy Haldiram’s?

Tata Consumers and Haldiram’s: Speculations are rife about the possibility of Tata Consumers buying a controlling stake in Haldiram’s with the traditional Indian snack maker valued at $10 billion. While both companies have officially denied any ongoing discussions regarding mergers and acquisitions (M&A), industry analysts speculate that such a move could prove to be EBITDA accretive for Tata Consumers, given its current product portfolio. Tata Consumers, a prominent player in the beverage and food products sector, currently offers a range of items such as tea, coffee, beverages, oats, and salts. However, it lacks a significant presence in the snack segment, which Haldiram's dominates with a wide array of traditional Indian snacks and sweets, including namkeen, bhujia, and soan papdi, among others. Experts have claimed that acquiring Haldiram's would not only provide Tata Consumers with an expanded product line but also grant them access to a vast consumer base. This move aligns with Tata's strategy of diversifying its offerings and extending its reach in the highly competitive Indian consumer goods market. A brief background of Haldiram’s-Who, when and why? Haldiram's: A culinary icon Founded in 1937 by Ganga Bhishen Agrawal, Haldiram's originated as a modest sweet and namkeen shop in Bikaner, Rajasthan. Initially focusing on traditional Indian sweets and snacks like bhujia and papad, Haldiram's rapidly gained popularity due to its commitment to quality and taste. As demand surged, Haldiram's expanded its operations, establishing shops and production units across India, including Nagpur, New Delhi, Gurgaon, Hooghly, Rudrapur, and Noida. The company also ventured into retail chain stores and restaurants in various cities, further solidifying its presence. Diverse Product Range Over the years, Haldiram's diversified its product range to include a wide variety of snacks and sweets, catering to different tastes and preferences. Haldiram's has over 410 products. The company offers products including traditional namkeens, western snacks, Indian sweets, cookies, sherbets, pickles, and ready-to-eat food products. Signature products like gulab jamun, Bikaneri bhujia, and papadum are among the most sold products of Haldiram’s. Global Footprint Haldiram's made significant strides in the international market, exporting its products to countries such as the United States, the United Kingdom, Canada, Australia, and the Middle East. This global expansion has solidified Haldiram's position as a renowned Indian brand worldwide. Innovation and Tradition While preserving its traditional recipes, Haldiram's has introduced innovative products to cater to evolving consumer preferences. They offer a wide range of packaged snacks and ready-to-eat meals, adapting to modern lifestyles. The 1990s saw the introduction of potato-based foods with the incorporation of machinery imported from the United States. Market Presence In a competitive landscape, Haldiram's commands a substantial 13 percent share of India's $6.2 billion savoury snack market, as reported by Euromonitor International. Rivals in this sector include Bikaji Foods, Bikano, and Bhikhaaram, among others. IPO talks Last year in November, media reports suggested that Haldiram's was eyeing an initial public offering (IPO) in the next 18 months. However, its rival Bikaji Foods International got listed on November 16, 2022, after receiving a healthy subscription for its IPO. While the Tata Consumers-Haldiram's deal remains speculative, the potential acquisition could reshape India's consumer goods industry and provide Tata with a savoury slice of the snack market. Despite official denials, industry watchers will undoubtedly keep a close eye on developments in this intriguing corporate saga.

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Will it be strategically-sound deal for Tata Consumers to buy Haldiram’s?

Last year in November, media reports suggested that Haldiram's was eyeing an initial public offering (IPO) in the next 18 months.

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