ChrysCapital has reinitiated discussions to acquire Theobroma Foods at a significantly reduced valuation of ₹1,800 crore, down from the original ₹3,000 crore ask, sources familiar with the matter said. The negotiations, which had stalled due to Theobroma’s weaker-than-expected financial performance, have gained momentum again, with a formal agreement expected within a month.
Market conditions, including declining consumer spending in urban areas, have played a key role in lowering Theobroma’s valuation. The company, known for its premium bakery products, had earlier explored an initial public offering (IPO), but plans were put on hold due to unfavorable market sentiment.
ChrysCapital has been actively looking to build a quick-service restaurant (QSR) platform and had previously considered acquiring multiple brands, including Theobroma and The Belgian Waffle Co. However, with the latter’s stake sale facing delays, the terms of the Theobroma deal are being renegotiated.
ICICI Venture, which holds a 42% stake in Theobroma, along with the founding family, had appointed Arpwood Capital last year to oversee the company’s sale. While ChrysCapital had been in advanced discussions, valuation concerns had put the transaction on hold.
Theobroma is projected to report revenue between ₹525-550 crore in FY25, with an EBITDA of approximately ₹80-100 crore. In FY24, the company recorded an adjusted EBITDA of ₹60 crore on a revenue of ₹400 crore. Despite these figures, several potential buyers, including Bain Capital, Carlyle, and Switz Group (owner of Monginis), have backed out, citing market uncertainties.
“The stock market downturn and slowing discretionary spending in urban areas have contributed to a significant reduction in valuation,” an industry executive said. “Unlike mass-market brands, which cater to entry-level pricing, Theobroma’s premium positioning makes it more susceptible to a consumer spending slowdown.”
The food services sector in India is expected to reach ₹7.76 lakh crore in sales by 2028, according to the National Restaurants Association of India. However, rising costs of key ingredients like cocoa, coffee, and edible oil have put pressure on restaurant margins. A report by JP Morgan predicts cocoa prices will remain high in 2025 due to global supply shortages and underinvestment in cocoa farms, potentially affecting chocolate and confectionery businesses like Theobroma.
Founded in 2004 by sisters Kainaz Messman Harchandrai and Tina Messman Wykes, Theobroma has grown to 200 outlets across 30 cities. As discussions with ChrysCapital progress, industry experts are watching closely to see if this deal can provide the much-needed capital boost for Theobroma’s next phase of growth.