In a significant business development, Authum Investments & Infra has announced its plan to acquire a major stake in Prataap Snacks, the well-known snack manufacturer from Madhya Pradesh, famous for its Diamond brand. This move is part of a broader strategy by Authum to diversify its portfolio and grow its business, creating value for its stakeholders. The acquisition deal was revealed on September 27, and Authum will work with investor Mahi Madhusudan Kela to finalize the transaction.
Details of the Acquisition Deal
Authum Investments has entered into a share purchase agreement with Mahi Madhusudan Kela on September 26, under which it will buy 46.84% of Prataap Snacks’ shares. These shares are currently held by Peak XV Partners Growth Investment Holdings I, Peak XV Partners Growth Investments II, and Sequoia Capital GFIV Mauritius Investments. The transaction will involve the purchase of 1.13 crore shares of Prataap Snacks at Rs 746 per share, totaling Rs 846.6 crore.
Once this deal is completed, which is expected to take around six months, Authum will own 42.31% of Prataap Snacks. Following this, Authum will launch an open offer to acquire an additional 26% of the company’s shares from public shareholders at Rs 864 per share, aiming to cross the 50% ownership threshold. The open offer is expected to cost Rs 544.17 crore.
Market Impact of the Announcement
The news of the acquisition had an immediate effect on the stock prices of both Prataap Snacks and Authum Investments. Shares of Prataap Snacks closed slightly lower at Rs 1052.00, a drop of 0.17%, while its intraday price fluctuated between Rs 1156.55 and Rs 1008.40. Authum Investments also experienced a minor decline of 0.15%, closing at Rs 1701.40, with an intraday range between Rs 1789.20 and Rs 1686.10.
Prataap Snacks Will Stay Listed
Despite the ownership changes, Prataap Snacks will remain listed on the stock exchanges, and its shares will continue to be traded. Authum Investments has clarified that this acquisition is part of a long-term strategy aimed at portfolio diversification and business growth to benefit shareholders. According to June quarter data, Madhusudan Kela still holds a 2.8% stake in Prataap Snacks through his fund.
This acquisition marks a significant move for Authum, allowing it to expand its reach in the fast-moving consumer goods (FMCG) sector, particularly in the snacks market.
