Prataap Snacks’ new owners seek exit options amid growth stagnation
Despite efforts to optimize grammage and trade margins, the company’s growth trajectory has turned tepid.
INDIA – India’s snack food sector is witnessing fresh tremors as the new owners of Prataap Snacks Ltd., Authum Investment & Infrastructure, and investor Madhusudan Kela are reportedly exploring exit options just months after acquiring a controlling stake from Peak XV Partners (formerly Sequoia Capital).
The Indore-based maker of Yellow Diamond chips and namkeen is grappling with sluggish growth, particularly in its impulse pack segment, where ₹5(US$0.05675) price points dominate.
Rising input costs, volatile raw material prices, and intensifying competition from national and regional players have squeezed margins and dulled expansion prospects.
Despite efforts to optimize grammage and trade margins, the company’s growth trajectory has turned tepid.
Authum and Kela, who together hold nearly 47% of Prataap Snacks, have initiated discussions with potential buyers, including Haldiram, ITC, Advent-backed DFM Foods, and private equity funds.
A merger or strategic sale is on the table, as the promoters reassess their investment amid mounting market pressures.
The competitive landscape is fierce. Rivals such as Parle, Balaji Wafers, Crax, Bikanervala, and a wave of D2C brands like Baked BRB and Sweet Karam are aggressively expanding in the ₹47,000 crore (US$5.3345B) Indian snacks market.
Haldiram, for instance, recently raised US$1 billion at a valuation of US$10 billion, signalling its intent to scale rapidly.
Prataap Snacks had shown resilience in earlier quarters, reporting modest revenue growth and expanding its distribution via quick-commerce platforms.
However, the company’s EBITDA margins remain under pressure, and the recovery of rural demand has been slower than anticipated.
The ownership churn occurs at a critical juncture, as Authum had acquired its stake through a combination of an open offer and preferential allotment at premium valuations, making Prataap an associate company. However, with growth flattening and competition intensifying, the strategic calculus appears to be shifting.
Industry watchers say any potential deal could reshape the snack food sector, especially if a heavyweight like ITC or Haldiram steps in.
For now, Prataap Snacks remains at a crossroads, caught between legacy ambitions and the harsh realities of India’s fast-evolving FMCG battlefield.
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