Local food brands are drawing attraction from investors within and foreign countries . Food processing industry is in very nascent stage in India and have only 3- 5% processing done for its large stock of food items . Exports are negligible in comparison what we find for other major food producing nations like Brazil , Australia and China even smaller countries like Malaysia , Indonesia , Philippines and Thailand are far ahead in food processing . Looking into huge potential in this industry investors are putting money on emerging and local brands .
A Report
A Report
Lesser-known food and beverage brands in India are attracting large financial investors, a study of recent private equity deals in the space revealed.
Last week, US-headquartered Sequoia Capital India announced that it had bought a stake in Indore-based Prakash Snacks Pvt Ltd for US$30m. Prakash Snacks is the maker of Yellow Diamond brand potato chips, assorted Indian snacks, and a supplier of private label brands to retail supermarkets.
According to an official at Prakash Snacks, who asked not to be named as he is not authorised to speak to the media, Sequoia has bought a minority stake, though he was unable to confirm the exact percentage of the stake.
This is the second big investment in what can be called a Tier II brand after US-based buyout firm Carlyle Group invested US$22 m in Tirumala Milk Products Pvt Ltd in June last year. Tirumala was started as a small town enterprise in South India.
The same year, a fund backed by securities firm Motilal Oswal Ltd picked up 20 per cent of Bector's Food Specialties Pvt Ltd, maker of the Cremica brand of biscuits and breads, for an undisclosed amount.
Commenting on the increased activity in the second tier food and beverage space in India, a securities analyst who has a focus on the food industry said that it makes good business sense for investors.
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