Dabur, a leading player in the FMCG sector, would acquire a 51 per cent stake in Badshah Masala for a cash consideration of Rs 587.5 crore. The transaction would be Cash EPS neutral in the first year and accretive after that. The acquisition is expected to be over within the current fiscal. The remaining 49 per cent will be acquired after five years.
Dabur already has an extensive product portfolio. The move is in tune with Dabur’s aim to expand its food business to Rs 500 crore within three years. It will mark Dabur’s entry into the branded spices and seasoning market in India. Branded spices market in India is growing at a steady rate. There is an upgradation from unbranded to branded purchases and regional flavours are in high demand.
According to the report by Avendus Capital, the spices market in India is currently valued at Rs 70,000 crore. Branded spices make up a 35 per cent share. By 2025, this would double to Rs 50,000 crore. The report further suggests that by FY 30, 15 spices companies would cross Rs 1,000 crore in revenue. Dabur wishes to cash in on this trend.
Dabur will be competing with Everest, MDH, Sakthi Masala, Aachi and Eastern Condiments in the packaged spices market.
