GA is in talks to buy Ching’s Secret maker Capital Foods

KOCHI: Private equity firm General Atlantic LLC (GA) is in final stages of discussions to buy a controlling stake in Capital Foods Pvt. Ltd, the owner of the instant noodles brand Ching’s Secret, according to two people aware of the development.

GA will acquire the stake in Capital Foods from existing investor Invus Group, which holds 44%, and promoter Ajay Gupta, who holds the remaining 56% stake. The deal will value the company at ₹1,500 crore, said the first person on condition of anonymity.

Besides GA, other private equity investors interested in Capital First include US-based TA Associates.

Capital Foods also sells the Ching’s Secret brand of masalas and sauces, and Smith & Jones range of pasta masala, ketchup and cooking pastes. Capital Foods, which reported a revenue of ₹500 crore in PERIOD, generates about 80% of sales from the Ching’s brand.

Capital Foods is present in 11 states, with Maharashtra and Gujarat contributing about half of its overall sales.

Spokespersons for GA and TA declined to comment. Mails sent to Invus Group and Ajay Gupta of Capital Foods went unanswered.

In 2013, Kishore Biyani’s food and FMCG business division Future Consumer Enterprises — formerly known as Future Ventures — exited its sevenyear-old investment in Capital Foods by selling its entire 44% stake to Invus Group for ₹180 crore. The deal valued Capital Foods at ₹408 crore.

In 2006, Future Ventures, had invested ₹13 crore for a minority 33% stake in Capital Foods and increased its stake over the years.

An experienced hand in advertising field and former chairman and managing director of Forefront Advertising and Marketing, Ajay Gupta founded Capital Foods in 1996.

In Indian markets, Smith & Jones competes with Dabur’s Hommade brand.

The other brands in the cooking paste market, a segment where Ginger-garlic paste dominates, has also brands such as Mother’s Recipe, Nilon’s and Priya.

In the soup category, Ching’s major competitors such as Hindustan Unilever’s Knorr and Nestle India Ltd’s Maggi.

“With more and more unit families, women working full time and help (cooks and maids) becoming expensive and less available, the ready-to-cook and ready-to-eat, and processed ingredients market is set to grow exponentially,” said Harminder Sahni, founder and managing director of retail consultant Wazir Advisors.