Capital Foods, the maker of Ching’s Secret spicy noodles and fusion chutneys, is up for sale, and several Indian and global companies are vying to acquire it. Nestle to Tata, big FMCG firms race to acquire the maker of Ching’s Secret.
The three main shareholders of Capital Foods, Invus Group, General Atlantic, and the company’s founder chairman Ajay Gupta, have decided to sell their stake, which is expected to fetch $1-1.25 billion. The potential buyers and big FMCG firms include Nestle, Kraft Heinz, Hindustan Unilever, Tata, ITC, and Nissin Foods, according to a report in The Economic Times.
Bloomberg had earlier reported that Nestle has been discussing the terms of a potential deal for Capital Foods, which would likely value the firm at more than $1 billion. The ET report added that Reliance Industries was also in the race initially, but it is now not keen on pursuing the offer due to the steep valuation.
Capital Foods was founded by Ajay Gupta in 1995, and Kishore Biyani, CEO of Future Group, was the first external backer of the firm. He had bought a 33% stake in the company for Rs 13 crore and exited it in 2013. General Atlantic came on board in 2018.
In 2021-22, the company recorded a revenue of Rs 580 crore, a 14% decline as compared to FY21. However, in FY23, the company is expected to reach Rs 900 crore of revenue with a margin of 25%.
The sale of Capital Foods is expected to be an all-cash or part-stock transaction. Some potential suitors have suggested acquiring up to 75% of the company and taking it public. However, the final structure of the deal is yet to be decided.
Capital Foods is known for its Ching’s Secret brand of spicy noodles and fusion chutneys infused with so-called “desi Chinese” flavors. It also sells Smith and Jones cooking pastes and masala mixes.
The potential acquisition of Capital Foods by a large multinational company could provide significant benefits for both parties. For the buyer, it would provide a foothold in the Indian market and access to a range of popular and well-established brands. Capital Foods, on the other hand, would benefit from the resources, expertise, and global reach of a large multinational company, which could help it to expand its operations and reach new markets.
The Indian food market is a highly competitive and rapidly growing industry. According to a report by Research and Markets, the Indian food and beverage market is expected to grow at a compound annual growth rate (CAGR) of 11.1% from 2021 to 2026. The increasing demand for convenience food and changing food preferences of consumers are driving the growth of the industry.
In conclusion, the sale of Capital Foods has attracted the attention of several Indian and global companies, and the potential acquisition could provide significant benefits for both parties. With the Indian food market growing rapidly, the acquisition of a well-established player like Capital Foods could be an attractive proposition for a large multinational company looking to expand its operations in India
