Fri. Mar 29th, 2024
HUL Is Interested In Buying Majority States In MDH: Report

Hindustan Unilever Ltd (HUL) is trying its hands in striking a deal with Mahashian Di Hatti Pvt. Ltd (MDH), to acquire a majority of the stake in the Indian spice producer, reported the famous daily mint citing two people familiar with the development.
As per the report, MDH could see its valuation between ₹10,000 crore and ₹15,000 crore due to its pan-India engagement.

Avendus estimates the spice market to grow double to ₹50,000 crore by 2025, with regional players leading the market. The multi-cultural fusion of cooking habits makes it difficult for International companies to make a space for themselves in the regional markets. However, MDH created a niche and emerged as the pan-India brand– a name every individual is aware of!

“There is a clear-cut synergy in terms of joint brand building. In fact, Hindustan Unilever, with its formidable network, can take MDH to territories, where it has not touched to date,” an analyst tracking the sector told The Mint on a condition of anonymity.
Another analyst, however, believes In tier-III, IV and V areas, local brands rule the heart of people. Many local spice makers bring the authenticity of regional blend in spices to the households.

Takeovers Or Fundraising of Local Brands:

  • In May 2020, HUL’s counterpart ITC Ltd acquired Kolkata-based, one of the market leaders in West Bengal, Sunrise Foods Pvt. Ltd, for ₹2,150 crore, with a valuation of the company crossing 25 times the previous year’s operating profit.
  • Sunrise’s Ebitda in FY20 stood at ₹88 crore on a revenue of ₹591 crore.
  • In September 2020, Oslo-based consumer goods company Orkla bought a majority stake in Kerala-based Eastern Condiments Pvt. Ltd, which is famous for its ready-to-use spices and masala blends. It merged the local leader with its wholly-owned unit MTR Foods Pvt. Ltd.
  • On the front of pumping in funds, In June 2020, VC fund A91 Partners invested ₹125 crore in the spice maker Pushp.
  • Similarly, In October 2019, Intergrow Brands Pvt. Ltd pulled in $11.3 million worth of funds from Bahrain-based alternative investment firm Investcorp.

HUL Acquisitions:

In March 2020, HUL inked a pact with Glenmark Pharmaceuticals Ltd to buy VWash.

In December 2018, HUL bought GlaxoSmithKline ( GSK)’s Indian consumer nutrition business for ₹31,700 crore.

In August 2018, HUL added the ice cream and frozen desserts business of Vijaykant Dairy and Food Products Ltd to its vertical.

Also Read: HUL gets rid of coal usage across all operations, opts green alternatives

MDH: A Brand Beyond Boundaries

Mahashay Dharampal Gulati was born in Sialkot, then in undivided India, now in Pakistan. Although he was born in 1923, the foundation of MDH masale was laid in 1919, when his father, Mahashay Chunni Lal Gulati, opened a spice business called ‘Mahashian Di Hatti.’

Mr Dharampal was not a studious kid and had studied till class 5. Before assisting his father in his business, he tried his hands in selling mirrors, soap, etc., but none of them worked well. Eventually, he joined his father’s business, and gradually it picked up the pace. Locally, they became renowned as ‘Deggi Mirch Wale’.

The year 1947, when India and Pakistan became two new, separate states, changed their lives completely. Dharampal and his brother arrived at a refugee camp in Amritsar, from where they travelled for Delhi with barely Rs 1,500.

On reaching Delhi, Mr Dharampal bought a horse and started working as a tonga puller. But, the money generated from such a job was not enough to meet ends. Then he bought a shop measuring 14 feet by 9 feet in Karol Bagh, Delhi, and started his family business of selling spices from scratch. With time, MDH gained fame locally. In 1953, the spice makers started another store.

In 1959, he bought a plot in Kirti Nagar, Delhi, to set up a factory producing ground spices. With his signature red turban and ornate moustache, Mr Dharampal became the face of the spice brand over time.

Following the demise of founder Dharampal Gulati, MDH Spices, reportedly, has been discussing selling out some stakes to large conglomerates in India.

The company currently sells over 60 products in India. It produces 30 tonnes of spices a day, according to its website.

MDH posted ₹507 crore in Ebitda in FY21 on net sales of ₹1,191 crore.

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

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