Britannia Industries is in talks to acquire a majority stake in Kishlay Foods, a Guwahati-based company known for producing both western and traditional snacks, biscuits, sweets, potato chips, noodles, and tea, with an estimated valuation of Rs 600-700 crore, according to a report by The Economic Times.
The report quoted a source as saying that the deal is currently in the due diligence phase.
Kishlay Foods, established in 2001 by Sandeep Bajaj and Krishna Bajaj, began as a biscuit manufacturer and has grown into one of the leading snack food producers in Northeast India, offering brands such as Non-Stop, Kishlay, and Mamooz, as stated on its website.
According to a report by Tracxn, the company generated an annual revenue of Rs 350 crore for the financial year ending March 2023.
The report quoted another executive as saying that if the negotiations are successful, Britannia will secure a strong foothold in the Northeast market and expand into categories like noodles and tea, where it currently lacks presence.
The biscuit, dairy, and bakery products maker, under the control of Nusli Wadia, is actively pursuing this acquisition. This move comes at a time when the snacks market is expanding at a double-digit pace, and competition from regional and direct-to-consumer brands has intensified significantly, the report said.
Since the Covid-19 pandemic, regional brands have experienced a notable revival in sales across various categories, including biscuits, noodles, soap, hair oil, and tea.
Another executive, as quoted by the report, said that many well-established companies have been exploring acquisitions of regional brands, but several deals have been delayed due to disagreements over valuations.
During the pandemic, regional brands faced production setbacks due to supply chain disruptions. However, they have since bounced back, benefiting from lower commodity costs and improved last-mile delivery through quick commerce platforms, the report stated.
Kishlay Foods, which secured $15 million in its last funding round led by Norwest Venture Partners in 2018, operates an extensive distribution network across Northeast India. The company serves 46 million consumers through more than 200,000 retail touchpoints, according to information on its website. “We are expanding our distribution to the rest of India slowly and gradually,” it said.
Britannia, which posted a 3.74 per cent year-on-year sales growth for the quarter ending June, with revenues reaching Rs 3,967.38 crore, continues to focus on scaling its operations both domestically and internationally. In 2022, it acquired a majority stake in Kenya-based Kenafric Biscuits to strengthen its presence in Africa.
First Published: Sep 05 2024 | 10:02 AM IST
