Tata Group’s consumer unit is reportedly in talks to acquire a majority stake in Haldiram’s, a well-known Indian snack food company. However, Tata is not comfortable with the high valuation of $10 billion that Haldiram’s is seeking. If the deal goes through, Tata would become a direct competitor to Pepsi and Reliance Retail. In addition to Tata, Haldiram’s is also discussing the sale of a 10% stake with private equity firms, including Bain Capital. Tata Consumer Products, which owns brands like Tetley and has a partnership with Starbucks in India, is concerned about the $10 billion valuation because Haldiram’s annual revenue is only around $1.5 billion. Despite these concerns, Tata Consumer shares surged nearly 4% after news of the talks was reported. Tata is looking to acquire more than 51% of Haldiram’s, but has communicated to the snack food maker that their asking price is too high. If the acquisition is successful, it would be a significant expansion for Tata in the consumer products market. Haldiram’s, known for its popular snacks like bhujia, currently has a 13% share of India’s $6.2 billion savory snack market, on par with Pepsi. The company also has a presence in overseas markets and operates around 150 restaurants. In contrast, Tata’s consumer unit had revenue of $1.7 billion in the previous financial year. Haldiram’s Chairman, Manohar Lal Agrawal, has previously expressed the company’s plans to attract private equity investors and go public in the next few years. Haldiram’s, which has multiple registered companies, reported revenue of at least $981 million in the last financial year, with an annual operating profit of around $200 million. The $10 billion valuation that Haldiram’s is seeking represents 6.6 times its annual revenue, while its smaller rival, Bikaji Foods International, has a market capitalization of $1.5 billion, six times its annual revenue. Shares in Bikaji also increased following the news. Tata Consumer Products declined to comment on the market speculation, while Haldiram’s Chief Executive and Bain Capital representatives did not provide any comments. If Tata successfully acquires Haldiram’s, it would provide significant access to the packaged food and food services market, allowing Tata Consumer to expand its presence rapidly.