Just months after acquiring a significant stake in Indore-based Prataap Snacks Ltd, key shareholders Authum Investments and investor Madhusudan Kela are weighing an exit as the snack maker struggles with slowing growth and intensifying competition.
According to people familiar with the matter, early feelers have been sent to potential buyers, including Haldiram, ITC, Advent-backed DFM Foods, and private equity funds. A deal could involve either a controlling stake sale or a merger.
Authum Investment and Infrastructure Ltd (AIIL), led by Alpana and Sanjay Dangi, currently holds 42.93% of Prataap, while the founding Kumat family owns 11.99%. Kela, through personal entities and investment trusts, owns 7.41%. Together, Authum and Kela hold nearly 47% of the company. An exit by the two would put about 55% of Prataap up for grabs, potentially triggering an open offer for an additional 26% stake.
The company, best known for its Yellow Diamond brand, has been hit by weak demand in its core ₹5 impulse packs, which account for 85% of sales, and by volatility in raw material prices. Analysts say this high dependence on low-unit packs makes it difficult for Prataap to pass on costs in an inflationary environment.
The development comes as rivals, including Balaji Wafers, Parle, Crax, and newer D2C brands like BRB and Sweet Karam, expand aggressively, while Haldiram has laid out a $1 billion-backed expansion blueprint.
Despite challenges, industry observers believe Prataap’s national distribution network and diversified product portfolio hold long-term value. “The franchise, brand, and land bank have significant value. But at the right price, financial investors are sellers,” said a person close to the discussions.
Prataap’s stock closed 4% higher at ₹959.85 on the NSE lately, valuing the company at ₹2,288 crore, though it remains down 15% year-to-date.
Founded by brothers Amit and Apoorva Kumat in 2004 with cheeseballs, Prataap Snacks has grown into a national player selling chips, namkeen, extruded snacks, and, more recently, sweets and cakes. However, with competitors scaling up rapidly and consumer habits shifting, the company faces a challenging path to regain growth momentum.