Bikaji Foods International, a prominent player in the fast-growing Indian snacks industry, witnessed an impressive surge of nearly 7% in its stock value after announcing the acquisition of a 49% stake in Bhujialalji, a promising newcomer in the ethnic snacks market. The stock soared to Rs. 445 during intraday trading, representing a remarkable 4% increase from the previous close.
The acquisition deal included 9,608 equity shares and 396 CCDs (Compulsorily Convertible Debentures) at a valuation of Rs. 5,100 per security, amounting to a total of Rs. 5.10 crore. With each equity share valued at Rs. 10, Bikaji Foods seized the opportunity to invest in Bhujialalji, recognizing the brand’s potential in the realm of popular Bhujia and namkeen variants.
Deepak Agarwal, Director of Bikaji Foods, expressed enthusiasm regarding the strategic move, citing it as a crucial step towards achieving the company’s ambitious growth plans. He reassured stakeholders that the acquisition posed no threat of brand cannibalization, emphasizing that similar operating models had proven successful for multiple companies worldwide.
The decision to acquire Bhujialalji aligns with Bikaji Foods’ vision to expand its market reach significantly. As the company is strategically headquartered in Bikaner, the acquisition offers an opportunity to leverage the learnings and experiences of the newly acquired brand to propel accelerated growth and broaden the horizons of a diverse audience.
India’s organized snacks industry has witnessed a substantial surge in value, now estimated at Rs. 4.24 lakh crore. This impressive growth can be attributed to evolving lifestyles, rising incomes, and urbanization. Packaged food retail revenue surged from Rs. 2.43 lakh crore in FY15, registering a commendable CAGR of approximately 8.3% until FY22. Experts predict further expansion at an 8% CAGR over the next five years, reaching Rs. 5.7 lakh crore, as reported by Frost & Sullivan.
Furthermore, the Indian savoury snacks market, valued at Rs. 75,100 crores in 2022, is expected to reach an impressive Rs. 1.22 lakh crore by 2026, showcasing a promising CAGR of 13%. This growth trajectory underscores the immense potential for companies like Bikaji Foods and Bhujialalji to capitalize on the burgeoning market demand.
Jai Agarwal, the Promoter of Bhujialalji, expressed gratitude for the support received from market leader Bikaji Foods at such an early stage of their journey. This strategic collaboration opens up new growth avenues for Bhujialalji, allowing the brand to learn and expand while preserving its unique identity and brand value.
With this acquisition, Bikaji Foods is poised to fortify its market position while empowering Bhujialalji to independently flourish. The combined synergies from this strategic move are expected to drive both companies towards greater success, offering customers an even wider array of delectable ethnic snacks and enhancing their market presence across diverse retail channels.
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