India’s packaged snack food industry is entering a new phase of consolidation, with major players eyeing regional brands that command strong consumer loyalty. According to reports, ITC Ltd and PepsiCo are preparing to compete for a 10% stake in Balaji Wafers, one of India’s most successful homegrown snack companies.
Why Balaji Wafers is a Hot Pick
Founded in Gujarat in 1974, Balaji Wafers has grown from a small regional player into a household name in western and central India. Known for its potato chips and namkeen, the brand enjoys a cult following and, in some markets, even outsells PepsiCo’s Lays and Kurkure.
A key reason for its dominance is its retailer-friendly distribution strategy, offering better margins to shopkeepers, which has helped Balaji secure prime shelf space. Beyond India, it exports to the UK, US, and West Asia, widening its reach.
The company’s financials reflect its growth trajectory:
- Revenue (FY24): ₹5,453.7 crore (up 10.7% YoY)
- Profit After Tax (FY24): ₹578.8 crore (up 41.4% YoY)
Balaji is reportedly seeking to raise funds by selling up to 10% of its equity at a valuation of ₹40,000 crore (~US$4.53 billion). The proceeds will fuel its expansion into newer geographies across India.
Strategic Fit for ITC
For ITC, which has been actively expanding beyond its cigarettes business, Balaji presents a compelling opportunity. Over the last decade, ITC has strengthened its FMCG portfolio through brands such as Aashirvaad, Bingo!, Yippee! Noodles, and Sunfeast.
Acquiring a stake in Balaji Wafers would:
- Strengthen ITC’s foothold in the fast-growing packaged snacks market.
- Help it capture consumer demand in semi-urban and rural areas where Balaji has deep penetration.
- Provide an edge against global competitors like PepsiCo, which is also vying for the same stake.
This potential move underscores ITC’s strategy to drive long-term growth from its foods division, a segment that has steadily grown in contribution to overall revenues.
ITC Share Price Outlook
ITC shares have been under pressure in the past year, with a 12-month decline of 15.48%, largely due to concerns around its cigarette business and investor profit-taking. However, over a 5-year horizon, the stock has delivered gains of more than 139%, supported by diversification and steady FMCG growth.
Investors see the Balaji deal as potentially value-accretive, as it would strengthen ITC’s FMCG segment — a business vertical the market rewards with higher valuations compared to its legacy tobacco operations.
Bottom Line
If ITC succeeds in acquiring a stake in Balaji Wafers, it will mark a strategic milestone in its transition into a diversified FMCG powerhouse. With PepsiCo also in the fray, the deal reflects how regional snack brands are increasingly becoming the battleground for global and Indian giants alike.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.