Bikaji Foods Expects Rs 200-Crore Business Addition Via The Hazelnut Factory In 3 Years
The snacks manufacturer's Rs 131.01 crore investment in The Hazelnut Factory Food Products will be done in several tranches through internal accruals.
Bikaji Foods International Ltd. will fund its recent stake acquisition in quick service restaurant chain, The Hazelnut Factory Food Products Pvt., through internal accruals, Chief Financial Officer Rishabh Jain said.
The snacks manufacturer had on Wednesday announced plans to acquire a 53.02% stake in Lucknow-based The Hazelnut Factory Food Products for Rs 131.01 crore.
The top executive believes that Hazelnut Factory Food Products has the potential to add Rs 200 crore to the company’s business over the next three years.
“This business (Hazelnut Factory Food Products Pvt.) in FY25 will do close to Rs 60 crore to Rs 65 crore of topline, with an Ebitda of 10–11%. In the next three years, this business can do a Rs 200–crore business for us,” he said.
The investment will be done in tranches and is expected to be completed in the next two years, according to the company's statement.
Talking to NDTV Profit about the deal, Jain said that the investment would not involve any debt or fundraising and would be financed through internal accruals.
“We will invest in three phases for the acquisition and this is the first phase. We will invest close to Rs 61 crore in a mix of primary and secondary investment at a pre-money valuation of Rs 100 crore,” he said.
Jain explained that in the investment phases that follow, the upfront amount of Rs 61 crore will be made via the same route.
“We have done major capex expansion over the last year. We invested close to Rs 450 crore in the last three years in capex expansion and currently, we are close to 45–46% utilisation. For the next three years, we do not need major funds to grow our business,” he revealed.
Explaining the rationale behind The Hazlenut Factory acquisition, Jain said that it is part of the company’s overall strategy of making a ‘House of Brands’ in the QSR segment.
“We are anyhow into QSR. We have an outlet in Mumbai, which is doing fairly good business for us in the segment. We want to establish this business and it is a big category for us,” he noted.
The Hazelnut Factory has a presence in the bakery, patisserie, and artisanal sweets segment. It has six outlets in Lucknow, as well as one each in Kanpur and Delhi.
Shares of Bikaji Foods International were seen trading 1.18% lower at Rs 898.85 a piece on the NSE against benchmark Nifty's dip of 0.84% at around 2:30 pm.
