EXCLUSIVE | Prataap snacks promoters in talks with potential buyers for sale of controlling stake
The promoters of Prataap Snacks Limited (PSL), the company behind 'Yellow Diamond Chips,' are reportedly in discussions to sell a controlling stake in the listed company, people familiar with the matter told Moneycontrol on the condition of anonymity.
The negotiations are being led by Sequoia capital, which is part of the promoter group, and owns close to 47 percent of the Indore-based company.
The stake sale could also see the exit of the company's founders, the Mehta and Kumat families, which control a 22 percent stake, the sources said.
“A number of bulge bracket private equity funds and large FMCG companies have been approached. However, talks are at an early stage now,” said one of the persons aware of the matter.
Emails sent to Sequoia capital and a representative of Prataap Snacks seeking comments remained unanswered at the time of publishing this article.
In November, members of the Mehta family divested a 5.4 percent stake in PSL for Rs 105 crore through open market transactions. The shares were offloaded by Arvind Kumar Mehta, Kanta Mehta, Naveen Kumar Mehta and Arun Kumar Mehta, who collectively sold 13 lakh shares at an average price of Rs 805.05 apiece.
Sequoia capital first invested in the company in 2011 and has participated in multiple funding rounds since then. In June 2016, domestic private equity firm Faering Capital invested Rs 45 crore in the company. The company made its public market debut in 2017, listing at a 33 percent premium to the issue price. The stock has since delivered a negative return of around 22%.
In FY23, the company posted revenue to the tune of Rs 1,660 crore, an increase of around 15% over the previous year.
Selling nearly 11 million packets every day, PSL is one of India’s leading snack manufacturers and distributors. It operates out of seven owned and eight contract manufacturing facilities, serving over 1.7 million retail touch points in 31 states and UTs. The company's products include potato chips, extruded snacks and namkeen (traditional Indian snacks) sold under the Yellow Diamond and Avadh brands.
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PSL has a network of more than 5,000 distributors and sub distributors. It is planning to expand further, particularly in Jammu, to strengthen its capabilities in North India.
Prataap Snacks shares closed at Rs 987 on Friday on the NSE, down 1.14 percent from their previous close.
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Exclusive | Prataap snacks promoters in talks with potential buyers for sale of controlling stake - Moneycontrol
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