Sunrise Foods, the Kolkata-based maker of packaged spices, which competes with the likes of Everest and MDH Masala, has begun the groundwork for a strategic sale that might see its promoters dilute majority stake within the firm, mentioned individuals within the know. The promoters, which is the Sharma household from Kolkata, might also select to exit the agency altogether, the sources mentioned, relying on the contours of the deal.
The Sharmas are eyeing a valuation of Rs 2,500 crore, which is two-and-a-half instances estimated FY19 gross sales of Rs 1,000 crore. The firm has appointed JM Financial because the funding banker on the deal. A mail despatched to JM Financial elicited no response until the time of going to press. Shailendra Prakash Sharma, director, Sunrise Foods, mentioned he couldn’t touch upon market hypothesis.
The Sharmas, who’ve been spice merchants for many years, arrange Sunrise Foods in Kolkata in 1975. The Sunrise model is into complete, grounded and blended spices, with manufacturing models in Kolkata, Agra, Jaipur and Bikaner. The firm additionally exports to neighbouring markets comparable to Bangladesh and Nepal.
Sources mentioned the Sharmas could both select to exit the corporate in a single go or could section it out over just a few years. JM Financial’s mandate consists of tapping meals firms, who’re into branded commodities and could be eager to develop the Sunrise model each in India and internationally. Sunrise, mentioned trade consultants, had a powerful model fairness within the east and is understood for its standardisation and quality-consciousness.
“The promoters may exit completely or hold minority stake and subsequently exit over the next few years. The promoters probably feel they have achieved what they could and it is time to hand over the reins to a player with deeper pockets,” an official aware about developments mentioned.
According to trade estimates, the Indian spices market is price round Rs 40,000 crore yearly, with roughly 15-20 per cent of the market contributed by the branded phase. However, the speed of conversion from unorganised to organised is rising because the proliferation of sub-standard merchandise has elevated within the former phase.
Edible oil producer Emami Agrotech not too long ago forayed into the spices market, hoping to turn into a prime three participant nationally in just a few years. The packaged spices market is dominated by MTR within the south, Ashok and Goldiee Masale within the north, and the Sunrise and Cookme manufacturers within the east. Everest and MDH Masala are national-level gamers, with a presence throughout markets, mentioned consultants.