Prataap Snacks surges 20 per cent on acquisition plan

Prataap Snacks informed bourses that the company's board has approved the acquisition of around 80 per cent stake in Avadh Snacks Private Limited for a cash consideration of Rs. 148 crore. As for FY18, the company had a cash of Rs. 180 crore.

As of March 31, 2018, the company recorded sales of Rs. 138.87 crore which translates to a price to sales of around 1.1x. This acquisition will help Prataap Snacks to penetrate further in the Gujarat market.

Currently, the company's Rs. 5 pack dominates total sales with lion contribution of 80 per cent, however, company is aiming to bring down this share to 70 to 75 per cent in the next 3-4 years by product launches and premiumisation of its product portfolio.

Prataap Snacks is a leading Indian snack foods company in the organized snacks industry, it offers a wide range of products across categories of potato chips, extruded snacks, namkeen under the popular Yellow Diamond brand.

Avadh Snacks Private Limited started in 2010 is engaged in the manufacturing and selling of branded packaged snacks under the brand name, Avadh. Avadh has a well-diversified and strong product portfolio for namkeens like bhujia, chevda, fafda, gathiya, etc. and extruded pellets like wheels, cups, pasta, etc. with a strong presence in the state of Gujarat and now expanding to Maharashtra and Rajasthan.

With this development, the investors seem to be excited as the stock of Prataap Snacks jumped 20 per cent in Thursday’s trading session. But later, the stock cooled down and at 11:28 hours, the stock was trading at Rs. 1,239.8, up by almost 15.5 per cent.