Introduction SWOT Analysis What Is Demerger Why Demerger Happen What Is CCI CCI Demerger Process How CCI Approved Haldiram's Food And Haldiram’s Snacks Demerger Benefits Of Haldiram Demerger Disadvantages Of Haldiram’s Demerger Competition In Domestic Market Demerger Impact On Rivals Why Haldiram's, Should Not Opted For IPO And Remained A Privately-Held Company: Valuation What Hurdles They Faced During This Implementation

1. Submitted to: Shivam Sharma
Haldiram Demerger

2. INDEX
1) Introduction
2) SWOT Analysis
3) What Is Demerger
4) Why Demerger Happen
5) What Is CCI
6) CCI Demerger Process
7) How CCI Approved Haldiram's Food And Haldiram’s Snacks Demerger
8) Benefits Of Haldiram Demerger
9) Disadvantages Of Haldiram’s Demerger
10) Competition In Domestic Market
11) Demerger Impact On Rivals
12) Why Haldiram's, Should Not Opted For IPO And Remained A Privately-
Held Company:
13) Valuation
14) What Hurdles They Faced During This Implementation

3. Introduction
➢ Haldiram's is a popular Indian brand known for its wide range of
traditional and contemporary Indian snacks and sweets. The brand
was founded in 1937 in Bikaner, Rajasthan by Gangabisenji Agrawal
and expanded over the years to become a well-known name in the
food industry in India and abroad.
➢ Haldiram's products are known for their quality and variety, with a
range of traditional Indian snacks, sweets, and savories, as well as
more modern products that cater to changing consumer
preferences. Some of the popular products offered by Haldiram's
include namkeens, bhujias, sweets, chips, papads, and ready-to-eat
meals.

4. ➢ Over the years, Haldiram's has expanded its operations and now has a
presence in several countries, including the United States, United
Kingdom, Canada, Australia, and several countries in the Middle East
and Asia. The company's success can be attributed to its commitment
to quality, innovation, and customer satisfaction.
➢ Haldiram's product range includes a variety of snacks such as
namkeens, chips, and bhujia, as well as sweets such as rasgulla, gulab
jamun, and peda. The company also offers a range of ready-to-eat
meals, including curries, rice dishes, and snacks.
➢ Haldiram's success can be attributed to its focus on quality, innovation,
and customer satisfaction. The company has invested heavily in
research and development to create new products and flavors, and has
also implemented stringent quality control measures to ensure that its
products meet the highest standards.

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WEAKNESS
● Less Advertising
● Involved only in
Indian Snacks
● Presence mainly
in North India
OPPORTUNITY
● Increase its reach
in India and
Abroad
● Expand to Hotel
Business
● Increase the
number of Outlets
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THREAT
● Indians are inclined
to Western taste
● Increasing
competition from
other Brands like
Bikaner etc
STRENGTH
● Brand Awareness
● Product Line
● Trusted for Quality
● Attractive Packaging
● Supply Chain
SWOT Analysis

6. Haldiram’s foods
❖ Badam Halwa
❖ Rajbhog
❖ Rasmalai
❖ Rasgulla
❖ Ratlami Sev
❖ Soan Cake
❖ Chole bhature
❖ Rajma chawal

7. Haldiram’s snacks
❖ Alu Bhujia
❖ Bhavnagri Gathiya
❖ Bhelpuri
❖ Bhujia Sev
❖ Chana Choor
❖ Chana Nut
❖ Chana Cracker
❖ Mathri Mini
❖ Bhakarwadi
❖ Mini Samosa
❖ Methi Gathiya
❖ Mixture
❖ Moong Daal
❖ Namkeen Peanut
❖ Navaratan Mix
❖ Nimboo Masala. Haldiram

8. What Is Demerger
Demerger refers to the process of splitting a company into two or more separate entities.
In a demerger, the assets, liabilities, and businesses of a company are divided among the
resulting entities, and the original company ceases to exist. The objective of a demerger is
typically to separate distinct business lines, simplify the corporate structure, or allow each
entity to focus on its core competencies.
Demergers can take various forms, such as a spin-off, split-off, split-up, or carve-out. Each
form of demerger has different legal and tax implications, and the choice of the demerger
type depends on the specific circumstances of the company and its shareholders.
Overall, demergers are an important tool for corporate restructuring and can provide
benefits such as increased efficiency, improved corporate governance, and better
alignment of business strategies.

9. Why Demerger Happen
There are several reasons why a company may choose to pursue a demerger,
including:
❖ Focus on Core Business: A demerger allows a company to focus on its core
business and divest non-core assets or businesses that may be a
distraction or not aligned with its strategic objectives.
❖ Unlock Value: A demerger may unlock value by separating businesses
with different valuations and enabling each business to operate
independently and grow on its own.
❖ Simplify Corporate Structure: A demerger may simplify the corporate
structure by separating distinct business lines, reducing complexity, and
improving corporate governance.

10. ❖ Regulatory Requirements: In some cases, regulatory requirements or
restrictions may require a company to divest certain assets or businesses
to comply with regulations or to receive regulatory approvals for mergers
and acquisitions.
❖ Financial Restructuring: A demerger may be a part of a financial
restructuring to improve the company's financial position, reduce debt, or
improve liquidity.
❖ Investor Demand: Demergers may also be driven by investor demand, as
investors may prefer to invest in specific business lines or assets rather
than a conglomerate.

11. What Is CCI
The Competition Commission of India (CCI) is a statutory body established under
the Competition Act, 2002. It is responsible for promoting fair competition in the
Indian market and preventing anti-competitive practices. The CCI is
headquartered in New Delhi and has regional offices in various parts of India.
The primary functions of the CCI include:
1. Regulating mergers and acquisitions that could impact competition in the
market.
2. Investigating and penalizing anti-competitive agreements, abuse of dominant
market position, and other anti-competitive practices.
3. Promoting competition advocacy and awareness through various initiatives,
including research, training, and public outreach.

12. CCI Demerger Process
❖ Filing of the Demerger Proposal: The first step is to file a proposal for
demerger with the CCI, along with all the relevant documents and details. The
proposal should include details about the parties involved, the proposed
demerger, and the potential impact on competition in the relevant markets.
❖ Evaluation of the Proposal: The CCI will then evaluate the proposal to
determine its potential impact on competition in the relevant markets. The
evaluation may involve requesting additional information or documents from
the parties involved, as well as consulting with other stakeholders.
❖ Publication of the Proposal: Once the CCI has evaluated the proposal, it will
publish the proposal on its website and invite public comments and feedback.

13. ❖ Analysis of Comments and Feedback: The CCI will then analyze the
comments and feedback received from the public and other stakeholders, as
well as conduct its own analysis to determine the potential impact of the
demerger on competition in the relevant markets.
❖ Approval or Rejection: Based on its analysis, the CCI will either approve the
demerger proposal or reject it. In some cases, the CCI may approve the proposal
subject to certain conditions or modifications to ensure that it is in compliance
with the applicable laws and regulations.

14. How CCI Approved Haldiram's Food And Haldiram's
Snacks Demerger
The demerger of Haldiram's Food and Haldiram's Snacks was approved
by the Competition Commission of India (CCI) on December 10, 2020.
The approval was granted under Section 31(1) of the Competition Act,
2002, after a thorough evaluation of the proposal by the CCI.
As per the details available in the public domain, the demerger was
proposed to be carried out through a court-driven process, with the
transfer of various assets and liabilities of Haldiram's to the two new
entities, i.e., Haldiram's Foods and Haldiram's Snacks.

15. To evaluate the proposal, the CCI examined the potential impact of the
demerger on competition in the relevant markets, including the market for the
manufacturing and sale of Indian sweets, namkeens, and other food products.
The CCI also evaluated the market share of the parties involved and their
competitors, as well as the potential efficiencies and benefits of the demerger
for consumers and the economy.
After a thorough examination, the CCI concluded that the proposed demerger
would not likely have an adverse effect on competition in the relevant markets.
Therefore, the CCI approved the demerger subject to the compliance of certain
conditions and modifications to the proposed transaction, to ensure that it is in
compliance with the applicable laws and regulations.

16. Benefits of haldiram demerger
❖ Increased focus: Demerger can help each business focus on its core operations
without being distracted by the other business. This can lead to improved
efficiency and productivity.
❖ Clearer business strategy: Separating the two businesses can help clarify their
respective business strategies and goals, which can lead to better decision-
making and more effective execution.
❖ Improved financial performance: Demerger can also lead to improved financial
performance as each business can operate independently and pursue its own
growth opportunities. This can also lead to greater shareholder value.
❖ Enhanced competitiveness: Demerger can enable each business to focus on its
unique strengths and become more competitive in its respective markets.
❖ Reduced conflict: If there are any conflicts or disagreements between the two
businesses, demerger can help resolve these issues and enable them to operate
independently without any hindrance.

17. Disadvantages of Haldiram’s Demerger
❖ Reduced synergies: When two businesses are part of the same
entity, they may benefit from synergies in terms of shared resources,
distribution networks, and marketing strategies. Demerger can result
in the loss of some of these synergies, which can reduce efficiency
and increase costs.
❖ Brand dilution: Haldiram is a well-established brand in the Indian
food industry, and the demerger may lead to brand dilution as each
business tries to establish its own identity and branding. This could
result in confusion among consumers and impact the overall brand
image.

18. ❖ Higher costs: Demerger can result in increased costs, such as legal and
consulting fees, as well as the costs associated with establishing new
systems and processes for each business.
❖ Risk of duplication: The demerger can result in the duplication of certain
functions and processes, such as finance, legal, and human resources, which
can lead to inefficiencies and higher costs.
❖ Impact on employees: The demerger can have an impact on
employees, including potential job losses and changes in roles and
responsibilities.

19. Competition in Domestic Market:
There are several brands in the market which are competing for the same
set of customers. Below are the top competitors of Haldirams:
1. Bikano
2. Lehar
3. Aggarwal
4. Local brands
5. Bikaner

20. Demerger impact on Rivals
❖ Increased competition: After the demerger, both Haldiram Snacks and Haldiram
Foods are likely to focus on their core operations and pursue growth opportunities
independently. This could lead to increased competition in their respective segments,
as both businesses seek to expand their market share and customer base.
❖ Change in market dynamics: Haldiram is a dominant player in the Indian food
industry, and the demerger could potentially change the market dynamics in the
segments where Haldiram Snacks and Haldiram Foods operate. Other players in the
market may need to adapt their strategies to compete effectively.
❖ Innovation and differentiation: With each business operating independently, there
may be a greater focus on innovation and product differentiation. Both Haldiram
Snacks and Haldiram Foods may invest in research and development to create new
products and flavors, which could help them stay ahead of their rivals.
❖ Price competition: Increased competition could lead to price competition as
businesses try to attract customers. This could benefit consumers who may have
access to lower-priced products.

21. Why Haldiram's, should not opted for IPO
and remained a privately-held company:
Family-owned business: Haldiram's is a family-owned business, and the Agarwal family has been running the
company for several generations. The family may prefer to keep the company private, and not open it up to public
ownership or scrutiny.
Control and management: As a private company, Haldiram's has greater control over its management and
operations, and can make decisions without having to consult external stakeholders. The company may prefer to
maintain this level of control, rather than diluting it by going public.
Financial stability: Haldiram's is a profitable and well-established brand, and may not require external funding to
support its growth and expansion plans. The company may prefer to maintain its financial stability and
independence, rather than taking on additional debt or equity financing through a public offering.
Regulatory compliance: Listing on a stock exchange comes with a range of regulatory and reporting requirements,
which can be time-consuming and expensive. Haldiram's may prefer to avoid the regulatory burden associated
with being a publicly-listed company.
Overall, while going public can provide several benefits, such as access to capital and increased transparency, it
is ultimately a decision that depends on the specific circumstances and objectives.

22. Valuation

24. Indian snack market size: Rs. 32,000 crore
Line of business:
Packaged indian snack(60%)
Restaurant (15%)
Others (Sweets, Frozen food etc)

25. Annual revenue~ 3 Billion USD (Rs. 24,000 Cr), Includes the revenue of
Haldiram snacks & Haldiram foods both.
Toppled Pepsico to become the country’s largest snack brand.
Unit Economics:
● Revenue: 100%
● COGS : 40%
● Gross Margin : 60%
● Marketing & Distribution : 40%
● Salaries & Admin : 10%
● EBIDTA : 10%
Expected profit margin = 300 Million USD

26. WHAT HURDLES THEY FACED DURING
THIS IMPLEMENTATION
The decision of whether to list a company on a stock exchange or not is typically
determined by the company's management and its shareholders. There could be
several reasons why Haldiram's, specifically, has not opted for an initial public offering
(IPO) and remained a privately-held company:
❖ Family-owned business- Haldiram's is a family-owned business, and the Agarwal
family has been running the company for several generations. The family may
prefer to keep the company private, and not open it up to public ownership or
scrutiny.
❖ Control and management- As a private company, Haldiram's has greater control
over its management and operations, and can make decisions without having to
consult external stakeholders. The company may prefer to maintain this level of
control, rather than diluting it by going public.

27. ❖ Taxing issue - Expert tax advice helped to avoid unnecessary tax charges
during the transfer of assets. The consequences for directors permitting illegal
financial assistance are severe.
❖ Open communication channels- Confidentiality agreements may restrain you
from releasing certain information, but keeping staff informed is important.The
company which obtains the latest equipment and continued to benefit from a
highly skilled and motivated workforce.
❖ Insurance Benefit - Split-up entities also lose the co-insurance benefits that
they previously provided each other. This may adversely affect their borrowing
costs
❖ Regulatory compliance- Listing on a stock exchange comes with a range of
regulatory and reporting requirements, which can be time-consuming and
expensive. Haldiram's may prefer to avoid the regulatory burden associated
with being a publicly-listed company.

28. THANK YOU
Submitted By-
Aditya Nischal 2k22/UMBA/13
Ajay Kumar 2k22/UMBA/15
Akash Jain 2k22/UMBA/17
Ankit Akshay 2k22/UMBA/19
Ashish Garg 2k22/UMBA/21