Digging a little deeper into its RHP, Bikaji has highlighted three Haldiram Group companies as those engaged in the same line of business.
"Agarwal Sweet Shop" is fodder for all those who love memes. But one Agarwal family has satisfied our cravings for sweets and namkeens alike for generations courtesy of two of India's most famous traditional snack brands.
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As Bikaji Foods is set to go public, many are speaking about competition with Haldiram and how it will take immense work to challenge the latter's might in the pan-India market.
What many do not know is that both companies, rivals on the field, belong to the same family.
Haldiram's history goes back to the 1930s when Gangabishan Agarwal founded the snack company. Six decades later, his grandson, Shiv Ratan Agarwal, branched out to start his brand called Bikaji in 1993.
Over the years, Bikaji has established market leadership in its core markets of Rajasthan, Assam and Bihar.
Currently, Haldiram and Bikaji together control 40 percent of the overall traditional Indian snack market. Both are trying to ensure they do not overlap in their core business areas. While Bikaji has established leadership in Rajasthan, Assam, and Bihar, Haldiram, though present pan-India, has a larger presence in New Delhi and its headquarters in Nagpur.
Bikaji Foods' Red Herring Prospectus (RHP) lists Haldiram Foods International as a key competitor. Despite that, it has not fallen short in showing its praise as the market leader:
With a long heritage it (Haldiram) is expected to dominate the market over the next 4-5 years. A large product portfolio, products to suit individual palettes, attractive price points, robust supply chain, and attractive margins are some of the key factors that attribute to this leading position.Digging a little deeper into its RHP, Bikaji has highlighted three Haldiram Group companies as those engaged in the same line of business.
In fact, Bikaji's promoter Shiv Ratan Agarwal was also on the board of Haldiram India Pvt. Ltd. He resigned from his position and sold his shares in that particular company in July last year.
Among Bikaji's top five group companies that it has listed in its RHP, three of them are Haldiram Snacks Pvt. Ltd., Haldiram Foods International Pvt. Ltd., and Haldiram Ethnic Foods Pvt. Ltd.
One of the risks highlighted in Bikaji's RHP is the fact that the aggregate value of Related Party Transactions amounts to nearly 10 percent of its overall revenue. The company has also engaged in RPTs with Haldiram. Within the "Sale of Goods & Services" section of Related Party Transactions, Bikaji highlights transactions worth nearly Rs 6 crore with three Haldiram Group companies.
Additionally, there is an outstanding balance worth over Rs 12 crore pertaining to Related Party Transactions carried out with two Haldiram Group companies. Bikaji has also issued an advance of Rs 40 lakh to Haldiram Foods International Pvt. Ltd. against its Compulsorily Convertible Debentures.
First Published: IST