Bipin Hadvani, founder of Gujarat’s Gopal Snacks Pvt. Ltd, has raised debt from a JM Financial entity to buy out his younger brother Praful’s 30% stake in the company, two people familiar with the transaction said.
Bipin Hadvani raised about ₹490 crore (about $60 million) in debt from JM Financial Products Pvt. Ltd, the non-banking financial arm of JM Financial, to finance the deal, the people said, requesting anonymity. The entire transaction was valued at ₹517 crore, with Bipin Hadvani contributing the balance amount, the people cited above added. The deal valued Gopal Snacks at around ₹1,723 crore.
When contacted, Bipin Hadvani confirmed the transaction. However, Praful could not be immediately contacted. JM Financial declined to comment.
After the deal, Bipin Hadvani, the company’s managing director, and his wife Daxa will hold 95% in Gopal Snacks.
Mumbai-based Intensive Fiscal Services Pvt. Ltd, which has advised several snacks companies earlier, acted as the financial advisor to Bipin Hadvani, the firm said.
Gopal Snacks began with a single product, chavana, which means mixture in the Gujarati language, and was sold as a namkeen brand. The company currently has more than 95 products and more than 300 stock-keeping units (SKUs) in categories such as namkeen, wafers, corn snacks, papad, Indian spices, flour and oil soap.
Meanwhile, the company is preparing for a public listing by the third quarter of 2023 to raise ₹800 crore-1,000 crore, Bipin Hadvani said in an interview.
The company plans to use the share sale proceeds to build factories in new cities, expand into new product categories and for branding and marketing activities.
“From the IPO, our growth journey will accelerate expansion, our product portfolio across India and international domains,” he said.
The Rajkot-based company was originally started in 1991 as Gopal Gruh Udyog before it changed its name to Gopal Snacks Pvt. Ltd in 2009. It currently has seven plants across Gujarat, Rajasthan and Maharashtra. Gopal Snacks, which has more than 4,000 employees, makes 10 million packets per day. It operates in 11 states and supplies its products through 750 distributors and over 700,000 retailers.
The company posted net sales of ₹1,128 crore in FY21, up from ₹886 crore a year before. Net profit, however, fell to ₹20.5 crore from ₹44.1 crore during the period, according to VCCEdge. The FY22 financials could not be ascertained. In other transactions in this space, Reliance Retail is in talks to acquire Aakash Namkeen, Mint reported on 9 September. Last month, Bikaji Foods International, which also sells snacks and sweets, made its stock market debut.
Other snack makers include Haldiram Snacks Pvt. Ltd, Balaji Wafers Pvt. Ltd, Bikanervala Foods Pvt. Ltd and Prataap Snacks. Several startups in the healthy foods category have attracted investors, with Motilal Oswal PE investing in Happilo and Matrix Partners in Open Secrets.
Source: Mint