Last Updated: February 22, 2024, 10:40 IST
ITC is looking to acquire a 47 percent stake in Prataap Snacks
Prataap Snacks also sells traditional Indian namkeens under the Avadh brand.
Prataap Snacks share price, ITC share price: ITC is looking to acquire a 47 per cent stake in Prataap Snacks, which makes the popular “Yellow Diamond Chips”, the Economic Times reported on February 22.
This move is seen as a strategic step by ITC to expand its presence in regional markets, leveraging Prataap’s strong foothold in these areas.
Prataap Snacks also sells traditional Indian namkeens under the Avadh brand.
Prataap is best known for Yellow Diamond chips and traditional Indian namkeen under the Avadh brand. Listed Bikaji Foods, another large snacks company, had also looked at the deal but those negotiations also fizzled out, said people in the know.
Shares of Prataap Snacks rose as much as 14.29 per cent in Thursday morning trade to Rs 1,344.65 apiece, the highest level since January 24. It pared gains to trade 9.29 per cent higher at Rs 1,285 apiece as of 9:23 am. This compares to a 0.03 per cent decline in the NSE Nifty 50.
The decision to explore the acquisition comes after Prataap Snacks’ discussions with Haldiram’s, another major player in the snacks industry, fell through due to a mismatch in valuation, the ET report said. Similarly, negotiations with Bikaji Foods, another snacks company, also did not materialise.
The transaction if successful will trigger an open offer for an additional 26% of the Indore-based company, which has been a laggard ever since its stock market debut in 2017 when it listed at a 33% premium. Prataap ended 1% down at Rs 1,174.45 for a market value of Rs 2,802.19 crore on Wednesday.
In December 2023, Prataap Snacks reported net sales of Rs 408.31 crore, an 8.08 percent increase from the year-ago period. Its net profit for the December quarter came in at Rs 10.79 crore, significant growth of 215.39 percent compared to December 2022.
ITC’s strategic approach, known as the ITC Next strategy, aims to develop a future-ready product portfolio that caters to evolving consumer preferences.
With the acquisition of Prataap Snacks, ITC could leverage its strong distribution network to promote Prataap’s brand portfolio, further strengthening its position in the market.
At 10:15 am, shares of ITC Ltd. rose as much as 0.58 per cent to Rs 405.70 apiece.
On February 21, Prataap Snacks closed 1.7 per cent down at Rs 1,171 and ITC ended 0.7 per cent lower at Rs 403.35.
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