Investor Mahi Madhusudan Kela Stays Put in Prataap Snacks Amid False Exit Rumors

In a swift rebuttal to circulating misinformation, Prataap Snacks Ltd has officially confirmed that renowned investor Mahi Madhusudan Kela continues to hold his investment in the company. Contrary to recent speculative reports suggesting his exit, the company has clarified that Kela remains a strategic stakeholder, reinforcing confidence in the snack maker’s long-term growth trajectory.

This announcement comes at a critical juncture for Prataap Snacks, following its high-profile acquisition deal involving Authum Investment & Infrastructure Ltd and Mahi Madhusudan Kela, who together are set to acquire a controlling stake in the company.

Clarification on Investor Status

- Prataap Snacks Ltd issued a formal statement dismissing recent media claims that Mahi Madhusudan Kela had exited the company  
- The company emphasized that Kela remains actively invested and committed to the business  
- This clarification aims to dispel confusion and reassure stakeholders about the continuity of strategic leadership and investor confidence  

Background of the Acquisition

- On September 26, 2024, Prataap Snacks announced a major share purchase agreement with Authum Investment & Infrastructure Ltd and Mahi Madhusudan Kela  
- The duo agreed to acquire a 46.85 percent stake in Prataap Snacks from three private equity promoters: Peak XV Partners Growth Investment Holdings I, Peak XV Partners Growth Investment II, and Sequoia Capital GFIV Mauritius Investments  
- The acquisition deal was valued at Rs 846.60 crore, with shares priced at Rs 746 each  

Open Offer and Market Reaction

- Following the acquisition, an open offer was triggered to acquire an additional 26 percent stake from public shareholders  
- The open offer price was set at Rs 864 per share, aggregating to Rs 544.17 crore  
- Despite the offer price being lower than the prevailing market rate, investor sentiment remained positive, with Prataap Snacks shares surging nearly 20 percent on the day of the announcement  

Strategic Implications

- The acquisition positions Prataap Snacks as an associate company of Authum Investment, aligning with its strategy to diversify into high-growth consumer sectors  
- Mahi Madhusudan Kela’s continued involvement signals a strong endorsement of the company’s fundamentals and future prospects  
- Prataap Snacks will remain a listed entity, with no plans for delisting post-acquisition  

Company Profile and Performance

- Founded in 2003 in Indore, Prataap Snacks is one of India’s fastest-growing snack food companies  
- It operates under two primary brands: Yellow Diamond (savory snacks) and Rich Feast (sweet snacks)  
- The company runs 15 manufacturing facilities and partners with over 5,200 distributors, reaching 2.5 million retail touchpoints across India  
- For FY24, Prataap Snacks reported revenue of Rs 1,617.93 crore, with a 10-year CAGR of 14 percent  

Recent Developments and Growth Plans

- Prataap Snacks has been actively expanding its product portfolio and exploring new distribution channels, including exports and quick commerce  
- A strategic consultant has been appointed to lead a transformation program focused on revenue enhancement, operational efficiency, and market penetration  

Key Takeaways

- Mahi Madhusudan Kela remains a committed investor in Prataap Snacks, contrary to misleading reports  
- The acquisition by Authum and Kela marks a pivotal moment for the company, unlocking new growth avenues  
- Prataap Snacks continues to demonstrate resilience and innovation in the competitive FMCG landscape  

Sources: Moneycontrol, Economic Times, LiveMint, News18, CNBC-TV18