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Bikaji Foods Acquires 53.02% Stake in Hazelnut Factory

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Synopsis:

Bikaji Foods Retail acquires a 53.02% stake in Hazelnut Factory for ₹131 crore, marking its entry into the QSR segment and potentially impacting the Bikaji Foods share price.

Bikaji Foods news today

Bikaji Foods International Ltd, through its wholly-owned subsidiary Bikaji Foods Retail Ltd (BFRL), has acquired a 53.02% stake in Hazelnut Factory Food Products Private Ltd. The acquisition, valued at ₹131 crore, marks Bikaji Foods’ strategic entry into the Quick Service Restaurant (QSR) market and premium artisanal sweets and bakery segment.

BIKAJI FOODS INTERN LTD

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906.85-2.75 (-0.30 %)

Updated - 17 October 2024
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Expanding beyond ethnic snacks with strategic acquisition

Traditionally known for its ethnic snacks, Bikaji Foods is looking to diversify its product offerings with this acquisition. Hazelnut Factory, a Lucknow-based artisanal sweets and café chain, aligns with Bikaji’s ‘House of Brand’ strategy. The deal provides an opportunity for cross-selling products, optimising shared facilities, and expanding Bikaji’s reach within the premium food segment.

With this acquisition, Bikaji aims to leverage Hazelnut Factory's established presence in the café and artisanal sweets market, enabling a broader customer base. This move aligns with the rising trend of Indian consumers seeking high-quality, locally-sourced products, as well as the recent surge in home-grown cafes expanding their footprints.

Investment in tranches over two years

The ₹131 crore acquisition will be completed in phases over the next two years, allowing Bikaji Foods to gradually integrate Hazelnut Factory’s operations. Once the acquisition is fully realised, Hazelnut Factory will become a related party to both Bikaji Foods International and Bikaji Foods Retail under regulatory guidelines.

This phased approach allows Bikaji Foods to steadily absorb Hazelnut Factory into its portfolio, ensuring operational continuity and the seamless integration of resources. This acquisition is expected to help Bikaji create synergies within the QSR and premium sweets market, expanding its brand influence and distribution network.

Impact on Bikaji Foods share price

The acquisition of Hazelnut Factory could have a positive impact on the Bikaji Foods share price, as investors often respond favourably to strategic moves that diversify a company’s portfolio. By entering the QSR segment, Bikaji Foods positions itself for growth in a competitive market, potentially attracting investor interest. Additionally, the focus on artisanal sweets could help the company capture a niche segment, further strengthening its market presence.

The market will watch closely as Bikaji Foods completes the acquisition and integrates Hazelnut Factory's offerings. With new avenues for revenue generation, the impact on the Bikaji Foods share price may reflect optimism about the company's expanded business strategy.

The acquisition of a majority stake in Hazelnut Factory by Bikaji Foods marks a significant step in the company’s efforts to diversify beyond its traditional ethnic snack market. As the QSR and artisanal sweets market in India continues to grow, this strategic move could position Bikaji Foods well for future expansion, while potentially impacting the Bikaji Foods share price favourably. The gradual integration of Hazelnut Factory aims to ensure smooth operational synergies, positioning Bikaji for a stronger market presence in the evolving Indian café and premium food segment.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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