Bikaji Foods International acquires 49% stake in Bhujialalji, share jumps 7%
As per the filing made to the stock exchange, Bikaji Foods International Ltd. has successfully acquired a 49% stake in Bhujialalji Pvt. Ltd., a company operating in the ethnic snacks industry. In addition to the stake acquisition, Bikaji Foods International Ltd. has also acquired 396 Compulsorily Convertible Debentures (CCDs) in Bhujialalji Pvt. Ltd.
This strategic move by Bikaji Foods International Ltd. indicates the company’s interest in expanding its presence and diversifying its offerings in the ethnic snacks market. By acquiring a significant stake in Bhujialalji Pvt. Ltd. and holding CCDs, Bikaji Foods International Ltd. aims to strengthen its position in the industry and potentially tap into new growth opportunities in the ethnic snacks segment.
This acquisition aligns with Bikaji Foods International Ltd.’s strategic vision and business objectives, which may contribute to further growth and development within the company’s portfolio of products and services. As the ethnic snacks industry continues to evolve, this partnership has the potential to create synergies and enhance both companies’ competitive positions in the market.
In this acquisition deal, Bikaji Foods International Ltd. acquired a total of 9,608 equity shares and 396 Compulsorily Convertible Debentures (CCDs) from Bhujialalji Pvt. Ltd. The value of each security was set at ₹5,100, resulting in a total transaction value of ₹5.10 crore.
Breaking it down further, the 9,608 equity shares were acquired at a face value of Rs. 10 per share. The acquisition of these equity shares provides Bikaji Foods International Ltd. with a significant ownership stake in Bhujialalji Pvt. Ltd., giving the company a strategic foothold in the ethnic snacks industry.
In addition to the equity shares, Bikaji Foods International Ltd. also acquired 396 Compulsorily Convertible Debentures (CCDs) from Bhujialalji Pvt. Ltd. CCDs are a type of debt instrument that can be converted into equity shares at a future date, as per the terms of the agreement.
This acquisition of CCDs provides Bikaji Foods International Ltd. with additional financial exposure to the growth potential of Bhujialalji Pvt. Ltd., allowing the company to benefit from the company’s future performance.
Overall, the acquisition deal signifies Bikaji Foods International Ltd.’s commitment to expanding and strengthening its position in the ethnic snacks industry. By acquiring both equity shares and CCDs, Bikaji Foods International Ltd. demonstrates its confidence in the growth prospects of Bhujialalji Pvt. Ltd., aiming to capitalize on new growth opportunities and create synergies within the sector.
Bhujialalji Pvt. Ltd. (BPL) is a recent entrant to the ethnic snacks industry, offering a product portfolio that includes popular Bhujia and namkeen variants. In an official statement, Mr. Deepak Agarwal, Managing Director of Bikaji Foods International Limited, announced the successful acquisition of a significant 49% stake in Bhujialalji Pvt. Ltd.
Mr. Agarwal expressed excitement about this strategic move, which he sees as a small but crucial step towards the company’s ambitious growth plans. He emphasized that there is no fear of brand cannibalization, as similar models have proven successful globally. The collaboration between Bikaji and Bhujialalji Pvt. Ltd. is intended to leverage synergies, enhancing the overall market position of Bikaji while allowing the newly acquired brand to function independently.
Headquartered in Bikaner, the acquisition of Bhujialalji Pvt. Ltd. provides Bikaji with valuable learnings from this new brand, contributing to accelerated growth and expanding their reach to a new audience segment. Mr. Agarwal’s vision for Bikaji is to reach every household in India, and this acquisition is a significant step towards fulfilling that vision.
The strategic collaboration between Bikaji and Bhujialalji Pvt. Ltd. is poised to drive growth, foster innovation, and propel both companies towards greater success in the competitive ethnic snacks market. By combining their strengths and preserving the independence of Bhujialalji Pvt. Ltd., the partnership aims to strengthen Bikaji’s market position and achieve its ambitious growth targets.
During the occasion, Jai Agarwal, the Promoter of Bhujialalji Pvt Ltd, expressed gratitude for the support received from market leader Bikaji at such an early stage in their journey. This collaboration represents an opportunity for Bhujialalji to expand its horizons, learn from Bikaji’s expertise, and continue to grow while maintaining the salience of its brand. The company aims to capitalize on this partnership to expand its current market base, reaching out to diverse channels, including e-commerce and modern trade.
The acquisition of Bhujialalji Pvt. Ltd. by Bikaji comes at a strategic time for the snack industry in India. The organized snacktionary business in the country is currently valued at ₹4,240 billion, and it has experienced significant growth over the past five years due to changing lifestyles, increased incomes, and urbanization. In Fiscal 2015, the packaged food retail revenue stood at ₹2,434 billion, and it has registered an impressive Compound Annual Growth Rate (CAGR) of approximately 8.3% from Fiscal 2015 to Fiscal 2022. According to a Frost & Sullivan report, the market is estimated to grow at a CAGR of 8% in the next five years, reaching ₹5,798 billion by 2026.
The Indian Savoury Snacks market, which was valued at ₹751 billion in 2022, is projected to further increase to ₹1,227 billion by 2026 at a CAGR of 13%. These growth figures highlight the immense potential and opportunities within the Indian snack industry, making the acquisition of Bhujialalji Pvt. Ltd. a strategic move for Bikaji to expand its presence and tap into the rising demand for ethnic snacks.
With the combined strengths of both companies and the favorable market trends, the collaboration between Bikaji and Bhujialalji Pvt. Ltd. is well-positioned to capitalize on the growth prospects in the snack industry and strengthen their competitive positions in the market.
