Britannia Industries is in talks to acquire a controlling stake in Kishlay Foods, a Guwahati-based maker of western and ethnic snacks, biscuits, sweets, potato chips, noodles and tea, at a valuation of `600- 700 crore, executives aware of the development said.
“The deal is in due diligence stages,” one of the executives said. Kishlay Foods, founded by Sandeep Bajaj and Krishna Bajaj as a biscuits maker in 2001, is now “one of the largest snack foods manufacturers of Northeast India” with brands such as Non-Stop, Kishlay and Mamooz, according to its website.
The company recorded annual revenue of $41.8 million, or about `350 crore for the year ended March 2023, Tracxn said in a valuation report on Kishlay Foods.
“The negotiations, if they go through, will get Britannia a captive market in the Northeast, besides a play in large categories such as noodles and tea where it does not have a presence yet,” another executive said.
The Nusli Wadia-controlled biscuits, dairy and bakery products maker is keen on this acquisition “at a time when the snacks market is growing in double digits and competition from regional and direct-to-consumer brands has become hyper-intensive,” an executive cited above said. Emails sent to offices of Britannia and Kishlay Foods remained unanswered till press time Wednesday.
Regional brands have seen a sharp resurgence in sales across biscuits, noodles, soap, hair oil and tea post Covid-19. “A slew of large established companies has been in the market for tuck-in acquisitions of regional brands, though a number of deals have been stalled on valuation mismatch,” one of the executives cited above said.
While during the pandemic regional brands were forced to reduce manufacturing on account of disruptions, since then they have seen resurgence, amid reduction in commodity costs and last-mile reach enabled by quick commerce platforms. Kishlay Foods, which had last raised $15 million in a funding round led by Norwest Venture Partners in 2018, has a distribution network across Northeast India, serving 46 million consumers with over 200,000 retail touchpoints, according to its website.
“We are expanding our distribution to the rest of India slowly and gradually,” it said. Britannia, which saw a 3.74% on-year rise in sales for the quarter ended June at `3,967.38 crore, has been looking to grow its business in India and abroad. It acquired a controlling stake in Kenya-based Kenafric Biscuits in 2022 to expand in the African market.
This January, Tata Consumer acquired Capital Foods, which makes instant noodles and sauces under Ching’s Secret and Smith & Jones, for `5,100 crore. A report by market research company IMARC Group pegged the Indian snacks market at `42,694.9 crore in 2023 and projected it to touch `95,521.8 crore by 2032.
