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Bikanervala Foods is open to roping in a strategic partner and dilute 20 per cent to an MNC to gain expertise in sales, marketing, logistics and brand building.
The Indian sweets and snacks maker is interested in roping in mid-sized international companies who can not only help with financial muscle but also add value to its existing operations.
“We expect a strategic partner not only to add money but value in areas like sales, marketing, logistics and brand building. These are areas which MNCs are good at and we could also end up selling our products through their distribution channel. But we will be willing to sell not more than 20 per cent stake in the company,” said Suresh Goel, CEO, Bikanervala Foods.
The trend of MNC players trying to invest in domestic snack players has already been playing for a while. In the recent past, PepsiCo had shown interest in Balaji Wafers but the deal did not fructify.
The ₹1,500-crore Bikanervala Foods has been doing contract manufacturing for PepsiCo’s snacks for the past 15 years. Besides, PE funds had also shown interest in investing in the company last year but there have been no deals signed as yet.
“PE funds keep talking to us but we have not yet zeroed in on any of them,” Goel said.
Running two lines of businesses, packaged snacks (Bikano) and restaurant-cum-stores under the Bikanervala brand, it positions itself as the second largest domestic snack company after Haldirams (turnover estimated at ₹4,000 crore).
The strategic partner will also help in building its ₹500-crore packaged foods business under Bikano, which has been extended from ethnic snacks to Western foods such as nacho chips and biscuits, said Goel.
Assigning a capital expenditure of ₹250 crore for the next three years for enhancing its manufacturing base, the Delhi- based company would rather have an MNC as a strategic partner than roping in PE funds or go for an IPO to raise money immediately.
Besides, there are plans to enhance its international footprint by having its restaurant-cum-stores in the US (New Jersey) and Singapore. “We have entered into joint ventures with local partners in the US and Singapore to set up our restaurants which also double up as sweet shops,” Goel said. For instance, it will set up a store in Changi airport in Singapore measuring about 500 sq ft while in New Jersy its store will be about 3,000 sq ft. It already has restaurants in Dubai and New Zealand.
Back home, apart from its outlets in Delhi, Hyderabad and Ahmedabad, Bikanervala Foods recently entered the Mumbai market.
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