Bikaji Foods, India’s largest ethnic snacks brand, has recently made a noteworthy move in the industry. According to the filings submitted to the bourses, they have successfully acquired a 49% stake in the well-established Bikaner-based Indian snacks brand, BhujiaLalji. The deal, valued at INR 5.1 Cr, marks a strategic step for the listed food conglomerate in expanding its presence and portfolio within the snacks market.
The agreement consisted of 9,608 equity shares and 396 CCDs, with each security valued at INR 5,100, totaling INR 5.10 Crore. The equity shares have a face value of INR 10 each.
Established by Jai Agarwal in 2021, BhujiaLalji is a company that specializes in providing a range of ethical Indian snacks, such as namkeen and bhelpuri, that are ready-to-eat and available in both baked and fried varieties. With a diverse portfolio of over 14 products, BhujiaLalji boasts an impressive annual packaging capacity of 5,000 metric tonnes.
To provide some perspective on the growth of the two-year-old startup, it has already achieved a significant scale, accounting for approximately 15% of Bikaji’s annual production. Bikaji produced 35,588 metric tonnes in FY23.
The company distributes its products through authorized dealerships located in Rajasthan, Maharashtra, and West Bengal, as well as online platforms like Amazon and Flipkart. As stated in Bikaji’s report, BhujiaLalji generated a revenue of INR 18.08 Cr during the fiscal year 2023. However, the company incurred a net loss of INR 2.67 Cr after tax.
Jai Agarwal, Founder and promoter of BhujiaLalji, said on the acquisition, “We are grateful to have this support from a market leader like Bikaji so early in our journey. This collaboration opens new doors for us, allowing us to learn and grow while preserving our brand salience. We are hoping to geographically expand our current market base, ranging from e-commerce to modern trade channels.”
Deepak Agarwal, MD, Bikaji Foods, added, “This marks a small step in our big growth plans and we are confident that there is no fear of brand cannibalisation; in fact, multiple companies across the globe operate similarly.”
According to the Bikaji MD, BhujiaLalji will maintain its independent operations while simultaneously bolstering the parent brand’s market position.
“With the company strategically headquartered in Bikaner, this acquisition will help us leverage the learnings of this new brand to enable accelerated growth and expand our horizon when it comes to a new audience set,” he added.
Following the acquisition, Bikaji experienced a remarkable surge in its share price, reaching an impressive 52-week high at INR 468.95 on the BSE on Wednesday, July 19. The stock touched the upper circuit, indicating a significant upswing. Furthermore, the announcement of the acquisition led to a remarkable increase of over 10 times in the trading volume of Bikaji’s shares during the early hours of Wednesday’s trading session.
According to a Frost & Sullivan report, the Indian snacktionary industry is presently valued at INR 4.24 Lakh Cr, with a revenue of INR 2.43 Lakh Cr. Notably, it has achieved a Compound Annual Growth Rate (CAGR) of around 8.3% from FY15 to FY22. The industry is projected to maintain its growth momentum and is expected to grow at a CAGR of 8% over the next five years, reaching a substantial valuation of INR 5.8 Lakh Cr.
Simultaneously, the market for Indian savory snacks was valued at INR 75,100 Crore in the year 2022. It is projected to grow at a compound annual growth rate (CAGR) of 13%, reaching INR 1.22 Lakh Crore by the year 2026.