Bengaluru/Mumbai: Lal Sweets, a Bengaluru-based sweets and snacks company, is in discussions to raise about $40 million from private equity (PE) investors. This potential investment values the company at around $150-175 million, according to sources familiar with the matter.
The company, which offers a range of sweets, cookies, and savoury snacks, has received an initial offer from the private equity division of Motilal Oswal Group, one source revealed.
“The fundraising involves both new capital and the sale of some shares by the company’s promoters,” the source added.
Lal Sweets has hired Veda Corporate Advisors, an investment bank, to assist with the fundraising efforts. This marks the company’s first attempt to secure external investment since it was founded in 2010.
“Motilal Oswal PE is currently conducting their due diligence,” said a second source.
Neither Veda Corporate Advisors nor Motilal Oswal responded to requests for comment. Prateek Athwani, the Managing Director of Lal Sweets, also declined to comment on the situation.
Founded by Prateek Athwani, Lal Sweets has a presence in general trade, modern retail, online marketplaces, exclusive airport outlets, and the export market. The company is well-known for its popular products like Mysore Pak, Besan Laddoo, Kaju Katli, and Dharwad Peda.
According to a third source, the funds will help the company expand into new product areas such as healthy snacks, instant mixes, and frozen ready-to-eat options. “While Lal Sweets is already profitable, it is focused on boosting its revenue in the near future,” the third source said.
Expansion Plans
Lal Sweets is mainly known in southern India and parts of Delhi NCR in the north. They plan to strengthen their presence in these areas and explore new markets in northern India and internationally.
The company already ships its products to countries with significant Indian populations, such as the US, Singapore, and regions in the Middle East.
For the financial year 2023, Lal Sweets’ total revenue grew by nearly 40% to ₹85 crore compared to the previous year, as per its latest filings sourced from Tofler. It recorded an annual profit of ₹14 crore, recovering from a ₹2 crore loss in FY22.
The wider snacking industry has seen continued growth recently, with many new startups securing funds from investors. For example, Fireside Ventures invested $1.5 million in Chennai-based Sweet Karam Coffee in October last year, Farmley raised $6.7 million from investors led by BC Jindal Group in December 2023, and direct-to-consumer brand Adukale received $1.3 million from Force Ventures in April this year.
In a related development, it was reported in May that PE firms Blackstone, Temasek Holdings, and Bain Capital were considering buying a controlling stake in Haldiram Snacks Food Pvt. Ltd. The investors were looking to acquire at least 51% of the company, valuing it at $8-10 billion, according to sources.
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