Batter-maker iD to invest ₹100 cr in three world-class plants; eyes new markets

iD Fresh Foods, the 10-year-old idli-dosa batter maker, has assigned a capex of ₹100 crore to set up three world-class plants in Bengaluru, Mumbai and Dubai.

It will shut down some of the existing six plants in places such as Chennai and Bengaluru, and launch new ones to strengthen its presence in these markets.

“There would be three new world-class plants with a capacity to make 3-lakh-kg batter per day, and we expect a turnover of ₹600 crore from each in places such as Dubai, Bengaluru and Dubai. The capex of ₹100 crore would be deployed from the money we have already raised from our investors, PremjiInvest and Helion Venture,” said PC Musthafa, Founder & CEO, iD.

In fact there have also been feelers from big FMCG companies to invest into their venture to enter new categories like Indian breads, but iD has been resisting such moves.

“We have already been approached by some of the big companies, but we felt it was too early. We would look at partnerships once we reach a turnover of ₹1,000 crore,’’ he said.

iD raised ₹150 crore in its latest round by PremjiInvest with a valuation of ₹600 crore early this year.

“We have given a minority stake of less than 40 per cent to our investors, and the balance is held by my family,” he said.

With a turnover of ₹200 crore, iD (short for identity) has been facing increasing competition with new start-ups such as Fingerlix entering the fresh batter category.

“Fresh batter is a ₹1,000-crore opportunity and we believe with new players, we can create this category just like in the case of branded atta, which cannot be built by a single player,” he added.

Entering new markets in the north is next on the cards for the Bangalore-based company.

iD, which is present in 14 cities in the south and Mumbai, reaches out to 20,000 stores, and is alo eyeing the Delhi NCR region to open a small plant.

“Today we are absent in the north and east, but our next move would be to enter the Delhi NCR market,’’ he said. Besides it also expects about 20 per cent of its turnover to come from new markets in the UAE and Muscat.

The iD brand is also being test marketed in the US and UK markets.

It had also tried to spice up its menu by including chutneys, but had to withdraw from the category. It is now trying out a super-food category –grain-based fresh batter.

However, GST has been a blow for the batter category, where it has been fighting to reduce the tax rates.

“We managed to get the GST changed from 18 per cent to 12 per cent for the batter category since it was at 5 per cent before GST. Now we may not have not have any option but to pass this on as a price increase to our customers,” he added.

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