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Snack-maker Balaji Wafers is considering a stake sale of about 15-25 per cent to PepsiCo, the world’s largest beverages company.
The deal is expected to value the company at four to six times its current turnover of about Rs 1,000 crore.
Balaji Wafers, a Rajkot-based maker of potato chips and other savouries, is also in talks with strategic investors and private equity firms including Blackstone Group and Actis to raise funding.
“They had approached us a few months back, and since then we have been in talks. We intend to close the deal in the next two-three months, but there is no surety that the deal will go through,” a top official at Balaji Wafers said on condition of anonymity.
In 1994, PepsiCo had bought out its joint venture partner Lehar Foods to take on local players such as Balaji, A-Top Foods and Bikanerwala.
However, PepsiCo continues to face stiff competition in the domestic snack market, with the emergence of players such as Parle, DFM Foods (owner of ‘Crax’), Haldirams and, more recently, FMCG major ITC (‘Bingo’).
The US firm, which owns brands such as ‘Kurkure’ and ‘Lays’, has been losing its market share in the more than Rs 10,000 crore Indian savoury market.
The Balaji Wafers official said Pepsi and other investors had earlier approached the company last year, seeking stakes of 40-100 per cent.
“We were not looking for a complete exit,” he said, adding the company had hired advisory firm Ernst & Young to find a suitable investor. Balaji Wafers, set up in 1982, supplies food products across Gujarat, Maharashtra, Madhya Pradesh and Rajasthan.
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