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The snack food industry in India is experiencing a significant shift as Authum Investment & Infrastructure and Mahi Madhusudan Kela have announced their acquisition of a substantial 46.85% stake in Prataap Snacks, the company behind popular brands like Yellow Diamond and Rich Feast. This strategic move, valued at Rs 846.60 crore, signifies a significant shift in the ownership structure of Prataap Snacks, with the acquirers taking control from three prominent Private Equity promoters: Peak XV Partners Growth Investments I, Peak XV Partners Growth Investment Holdings II, and Sequoia Capital GFIV Mauritius Investments.
The acquisition is a clear indication of the growing interest in the Indian snack food market. Prataap Snacks has consistently demonstrated impressive growth, achieving a CAGR of 14% over the past decade, with its revenue reaching Rs 1,617.93 crore in the financial year 2024. The company's robust distribution network, encompassing 15 manufacturing facilities and over 5,200 super/sub-distributors, has enabled it to reach a remarkable 2.5 million touchpoints across India. This widespread reach and strong brand recognition make Prataap Snacks an attractive investment opportunity for investors seeking to capitalize on the burgeoning Indian snack food market.
The transaction, however, is not a simple acquisition. It comes with an added layer of complexity in the form of an open offer. This open offer, triggered by the acquisition of a controlling stake, aims to acquire an additional 26% of the company's shares from the market. This move ensures that the acquirers secure a larger share of ownership, potentially leading to greater influence in the company's future strategic direction. The offer price of Rs 864 per share, despite being lower than the stock's recent trading price of Rs 1,057.70, presents a potentially attractive investment opportunity for investors who are confident in the company's future prospects. This open offer could spark a flurry of activity in the market, with investors seeking to capitalize on the potential for share price appreciation.
The acquisition and the accompanying open offer hold significant implications for the future of Prataap Snacks. While the acquirers have confirmed that Prataap Snacks will remain a listed entity, there is a possibility of changes in the company's strategic direction. The new investors, with their own expertise and vision, may influence decision-making processes and potentially lead to new initiatives, product launches, or market expansion strategies. The impact of these changes on Prataap Snacks' trajectory will be closely watched by industry observers and investors alike.
Source: Authum Investment, Mahi Madhusudan Kela to Acquire 46.85% Stake in Prataap Snacks