Namkeen Dreams & AI Schemes
Edition #19
Welcome back to Beyond Markets – your trusted source for breaking down the financial world! In this edition, we’ll dive into the exciting developments surrounding Haldiram’s global race for investors, explore the next big thing in retail with discovery shopping, and break down what’s happening with IndiaMART’s sharp stock price drop
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Private Equity wants Namkeen
The small, savory snack known as "bhujia" originated in the streets of Bikaner, India, now at the center of a global financial frenzy. This is no ordinary namkeen tale, but rather the story of how Haldiram Snacks has evolved into a giant worth an eye-popping $11 billion.
The world’s leading private equity firms—Blackstone, Bain Capital, and Temasek—are knocking on Haldiram’s door, hoping to claim a slice of the world’s most iconic bhujia maker. And why not? This isn’t just about snacks anymore. With over 500 products in its portfolio—ranging from sweets to ready-to-eat meals, beverages, and even pasta—Haldiram is more than just your neighborhood munchie provider. It’s a global force with operations in 100 countries.
How It All Began
Haldiram’s story is rooted in tradition. The company, which started with a simple idea, perfected the art of making Bikaneri bhujia over 87 years ago. Fast forward to today, and it has morphed into India’s largest snack and convenience foods company. But how did bhujia—a snack born in a small town—end up on the radar of some of the most prestigious global investors?
The answer lies in Haldiram’s bold strategy of diversification. It’s not just about bhujia anymore; the brand has stretched its wings across the world, from launching sub-brands like Cocobay (chocolates) to acquiring smaller snack makers like Babaji Namkeen and Atop Foods. Haldiram’s exponential revenue growth of 18% over the past five years, along with a beefy EBITDA margin, is enough to make any investor’s mouth water.
A High-Stakes Snack Game
What makes this even juicier is the competition among global private equity players. The Agarwal family, which still holds the reins of this empire, is looking to sell a 10-15% stake. Earlier reports hinted at a much larger sale, owing it to ‘lack of interest’ by the succeeding generation but for now, global firms are more than happy to settle for a minority slice. But there’s a catch: the family’s valuation expectations are nothing short of gourmet—valuing the company at a hefty $11 billion.
This isn’t the first time global suitors have come knocking. Just a few years back, snack giant Kellogg’s flirted with the idea of acquiring Haldiram but walked away, overwhelmed by the complexity of the deal. More recently, Tata Consumer Products also expressed interest but hesitated at the steep price tag. It’s clear Haldiram is a crown jewel, and unlocking that value might take more than just patience and deep pockets.
Snacks, Smiles, and Supermarkets
Beyond the boardroom drama, Haldiram continues to charge forward with ambitious plans. Not content with just snacks and sweets, the company is making a big play in retail and quick commerce, taking on big brands like Britannia in the cookie space and Amul in chocolates. As if that wasn’t enough, Haldiram’s is going head-to-head with PepsiCo and ITC in India’s booming snacks market, which is set to hit ₹1.19 lakh crore by 2025.
It’s not all about the money, though. At the heart of Haldiram's success is its understanding of the Indian palate. As India's tastes have evolved, so too has Haldiram’s product line, catering to both traditional and modern snackers. This versatility, combined with smart branding and distribution, has kept Haldiram at the top of its game in an increasingly competitive market.
What’s Next?
With a merger underway between Haldiram’s Nagpur and Delhi factions, the company is poised for its next big leap. Could a public listing be on the cards? If the Agarwal family plays it right, Haldiram could soon become a household name on the global stock exchanges, giving even greater access to the bhujia-loving masses.
So, as investors around the world queue up for a taste of this snack giant, one thing is certain: the global race for Haldiram’s isn’t just about namkeen. It’s about building a legacy that turns humble snacks into a billion-dollar business, one crunchy bite at a time.
How much AI is too much AI? Enter ‘Discovery Shopping’
We’re living in an era where AI not only predicts what color shirt you want but probably even guesses what toppings you’ll have on your pizza. But let’s face it—while the precision of personalized shopping has made many lives easier, it’s also sucking some of the fun out of the shopping experience. Enter the next retail revolution: Discovery Shopping.
Predicting the Predictable
We’ve heard the AI hype by now—algorithms that nail down your shopping preferences with the accuracy of a hawk. Whether it’s green curtains, pineapple pizza (really?), or even your taste in music, AI has us covered. Shopping with AI-driven recommendations has created a conveyor belt of convenience for the masses, bringing personalized options right to your screen. It’s no longer about taking risks or trying something new but about having your choices predicted and served up with a side of efficiency. Boring? Well, for some, yes.
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But What If You Want to Be Surprised?
That’s where discovery shopping swoops in. Think about all your different apps, most of them now have ‘Discover’ mode. This new trend caters to consumers who crave the unexpected. Instead of receiving products that fall within the narrow scope of their previous choices, discovery shopping offers an element of mystery—a digital version of a treasure hunt. It’s for those who are bored of always getting what they think they want and are ready to try something they didn’t even know existed.
Fuchsia Curtains? Electro-Folk Music? Why Not?
The beauty of discovery shopping lies in its ability to break through the AI monotony. If your current preferences revolve around black t-shirts and death metal playlists, discovery shopping might throw a fuchsia shirt and electro-folk band into your cart just to help you explore beyond your norm. And who knows? You might love it.
This isn’t just a wild shopping gamble; it’s about reintroducing spontaneity and fun to the shopping process. Retailers that can master this approach—using the right mix of marketing flair and novelty—stand to capture a slice of the premium consumer segment that values experiences over predictability.
A New Wave of Retail
So, will this trend revolutionize retail? The answer could be yes. Much like experiential shopping in physical stores, discovery shopping is about offering something fresh, new, and unique. It's a bold move in a world dominated by AI precision, but if done right, it could transform the very way we think about online shopping.
In the end, this isn’t just about fighting off algorithm fatigue; it’s about rethinking how we shop in a world increasingly dominated by predictability. Maybe you’ll get exactly what you expected—or maybe you’ll discover something you never knew you wanted. Either way, the journey promises to be exciting.
IndiaMART’s Slide: A Sign of Slow Growth Ahead?
IndiaMART Intermesh, the country’s largest online B2B marketplace, released its Q2FY25 results over the weekend, but it wasn’t the kind of news that investors were hoping for. When the markets opened on Monday, IndiaMART’s stock price tanked over 16%, a clear reaction to the disappointing financials.
So, what’s causing the shake-up in investor confidence? Let’s break it down.
The Slowdown in Collections Growth
IndiaMART reported a meager 5.6% year-over-year (YoY) growth in collections for Q2FY25—the slowest since the company’s listing (excluding the COVID period). For a company that has long been seen as a growth story in India’s digital economy, this is troubling. Not only did it miss market expectations of around 13% YoY growth, but the management also revised down its growth forecast. Just a few quarters ago, IndiaMART was expecting 20%+ growth, but now, that has been trimmed to 10-15%.
Paid Subscriptions Take a Hit
Another concerning trend was the sluggish growth in paid subscriptions. IndiaMART added only 2.4K paid suppliers during the quarter, missing the muted forecast of 2.7K and far below the historical average of 4.5K per quarter. This marks the fourth consecutive quarter of deceleration in collections growth and the sixth quarter where paid supplier additions have been subpar.
Structural Issues, Not Just a One-Off
While the company’s management attributed this poor performance to “sales execution issues” and hinted that it could be a one-off quarter, analysts are not as optimistic. JM Financial, in particular, has pointed out that the challenges IndiaMART faces are structural and not likely to be easily resolved. High churn rates among smaller suppliers (particularly in the Silver category) are weighing on volume growth. Moreover, the company’s ability to up-sell to existing customers has slowed, dragging down the average collections per paid subscription.
Market Reacts: Is De-Rating Imminent?
With these issues at hand, the stock’s sharp correction seems warranted. JM Financial has reiterated its ‘SELL’ rating on the stock, citing concerns about its future growth prospects. The target price has been slashed to ₹2,350, reflecting a significant de-rating. With a high base of paid subscriptions and declining momentum in collections, it appears that IndiaMART’s best growth days might be behind it.
What’s Next for IndiaMART?
While the management remains hopeful for a turnaround, the numbers suggest a more cautious outlook. Structural challenges, a shrinking base of paid suppliers, and slow collection growth indicate that the company may have to adapt quickly if it wants to regain investor confidence. With competition increasing in the B2B e-commerce space, IndiaMART will need to address these operational issues or face the risk of falling further behind.
In a market that demands results, IndiaMART’s next moves will be crucial in determining whether it can turn things around or continue to face the heat. Investors, it seems, are choosing to err on the side of caution for now.
Infotrend
The Info-Trend illustrates how despite the Nifty being only 5.6% down from its highs, individual stocks—particularly in midcap, smallcap, and microcap categories—have seen much steeper declines. In fact, 74% of the top 1,000 companies are down more than 10%, with 39% down over 20% from their 52-week highs. This disparity between the overall index and broader market performance highlights the challenges faced by many companies even in what may appear to be a stable overall market.
That's all for this edition of Beyond Markets by blinkX! Let us know in the comments what you think and what would you like us to cover in the next edition? Have a great week!