Peepul Capital Engages Avendus for Unibic Foods Stake Sale
Peepul Capital eyes lucrative stake sale in Unibic Foods; a glimpse into the brand's promising journey & the changing market dynamics
In a significant turn of events, Peepul Capital, the mid-market private equity firm, is contemplating the sale of its stake in Unibic Foods India. This strategic move could involve the sale of either a part of or the entire stake that Peepul holds in the renowned cookie manufacturer. The firm has brought Avendus Capital on board to spearhead the process of exploring viable options for the sale, according to sources close to the matter. This development comes amidst Unibic Foods showing signs of financial robustness and business growth.
The Journey of Unibic Foods India
Originating as an arm of Australian Unibic Biscuits, Unibic Foods India was established in Bengaluru in 2004. A creation of collaborative minds - Nikhil Sen, previously at the helm at Britannia, along with Michael Quinn of Unibic Australia and Dhruv Deepak Saxena. In its early stage, the company attracted investment from Lighthouse, which acquired a 25% stake for about ₹20 crore in 2007.
The pivotal year for the brand was 2012, with Peepul Capital investing around ₹100 crore, thereby obtaining a majority stake. Consequently, Unibic Foods transitioned to a fully Indian entity, entrusting the reins to Sen as its managing director. Following Sen's demise in 2019, leadership dynamics shifted with Srini Vudayagiri stepping in as director and later assuming command of the enterprise. By 2021, Naveen Pandey rose to helm the company as the Chief Executive Officer.
Financial Footprints and Market Landscape
Over the years, Unibic Foods has carved a niche in the premium cookie segment, demonstrating a steady fiscal trajectory. According to a recent ICRA Ltd report, the company registered an operating income of ₹596 crore and a net profit of ₹10.8 crore in FY22. Furthermore, it showcased a promising 32% revenue increase in the initial seven months of FY23, reaching ₹439 crore.
Despite being a strong player in the premium cookie sector, Unibic finds itself amidst fierce competition, with giants like Britannia, Parle, and ITC commanding a significant share of India's ₹40,000 crore market. The market is characterised by a plethora of offerings, including glucose, marie, and milk biscuits, along with crackers, from both regional and national brands. The ICRA report underscores the intense competition in the mid-premium and premium segments, which is Unibic's primary focus.
Despite the competitive landscape, Unibic has sustained a focus on its premium offerings, aiming for a profitable growth curve. Their strategy includes private label manufacturing for prestigious clients like Indigo Airlines, and exporting to various international markets, thereby expanding their footprint beyond domestic boundaries.
The Road Ahead
As Peepul Capital explores pathways for stake sale, with Avendus Capital at the helm, it's a time of anticipation for stakeholders and industry watchers alike. Unibic Foods, with its legacy of quality and innovation, stands at a crossroads that might redefine its future trajectory. The market awaits with bated breath to witness the unfolding of this new chapter in Unibic Foods' journey, one that promises new alliances and renewed vigor in its operational dynamics.