WestBridge Capital Partners has picked up nearly 25 per cent stake in DFM Foods, the maker of salted snacks under the 'Crax' brand from its promoters for Rs 64.5 crore or a little over $10 million. The public markets focused investment firm bought nearly 2.5 million shares from Mohit Jain, the vice chairman and managing director of the company and another family member.
The promoter holding has shrunk to around 45 per cent stake after the transaction.
As a part of the transaction, DFM Foods has also inducted WestBridge Capital co-founder Sandeep Singhal as an additional director.
DFM Foods scrip closed at Rs 259.1, up 0.19 per cent on BSE in a weak Mumbai market on Thursday.
DFM Foods has products like CRAX Corn Rings, CRAX Namkeen and NATKHAT.
The firm, which has strong presence in North India, has been expanding its product distribution in states like West Bengal, Odisha and Jharkhand. It has also introduced new products like wheat based student snack food Krunchoids, which sells at Rs 5 per packet.
For first nine months of FY14, DFM Foods reported a 19 per cent increase in revenues to Rs 200 crore while net profit was up 25 per cent at Rs 6.55 crore compared with the same period last year.
According to a 2013 report by consulting firm Technopak, the branded salty snacks market is estimated to be worth Rs 10,000 crore ($1.68 billion), and is projected to grow at a CAGR of 15-18 per cent over the next few years.
The segment has come under focus recently with Gujarat-based potato chips and snacks maker Balaji Wafers looking to raise funding. The company was earlier in talks with food companies such as Kellogg’s and PepsiCo, but is now reportedly in talks with private equity firms Actis and Capital International to sell 10 per cent stake.
In another deal in the segment, a few years ago Sequoia Capital India invested $30 million in Indore-based Prakash Snacks, which sells chips under Yellow Diamond brand.
Last year, WestBridge Capital had picked up stake in V-Mart Retail, which operates in tier II and tier III towns across states in north, west, central and eastern India. The firm has also been betting big on the construction and real estate space.
(Edited by Joby Puthuparampil Johnson)