Dabur is the new Badshah in town. The acquisition and what it means for both companies

To expand its FMCG business and grow in a Rs 25,000 crore branded spices and seasoning market, Dabur India has acquired a 51% stake in Badshah Masala Private Limited recently and will acquire the balance 49% in the next 5 years.

Dabur acquired a 51% stake in Badshah for Rs 587.52 crore, less proportionate debt as of the closing date. At a valuation of Rs 1,152 crore, the balance of 49% of Badshah Masala will be acquired after 5 years. This move enables Dabur to have larger access to the Rs 25,000 crore Indian spice industry through Badshah Masala, and expand its food business to Rs 500 crore in three years. 

History of Dabur India: Remember when your mum would force-feed you Dabur Chawanprash early in the morning? You might have also seen your grandparents brushing their teeth with Dabur Red Paste or the course red powder instead of the silky smooth white toothpaste we use today. Most of us remember Dabur India as that cult brand that introduced all kinds of ayurvedic and natural healthcare products into our everyday life.

Dabur is extremely popular in India and is India's fourth-largest FMCG company because it manufactures, markets, and exports products in so many FMCG categories. Be it hair care, oral care, health, skincare, home care, or food, Dabur is on every grocery shelf in India. Dabur also has a strong global presence with Dabur's overseas revenues accounting for over 27% of its total turnover. 

In FY 21-22, Dabur India Limited's consolidated revenue crossed the Rs 10,000 crore mark for the first time and Dabur marked an annual growth of 13.9%. Dabur had 12 brands above Rs 100 Crore in size, 2 brands over Rs 500 crore in size, and another 4 brands with a turnover over Rs 1,000 crore. 

Badshah Masala: On the other hand, you might remember the 100 year+ old 'Badshah Masala's' jingle on your TV ads because those ads sold ''Biryani, Pulav, and Chole masala''. Badshah Masala is particularly well known for its spices that are sold across India and the globe and for those jingles which are particularly played in cinema intervals. 

How does this acquisition benefit Dabur and Badshah Masala? As Dabur is set to acquire Badshah Masala completely in the long run, it is set to become the new 'Swad Sugandh ka Raja'. This is because the branded spices market in India is growing in multiple digits because of increasing consumption, an upgradation from unbranded to branded spices, and a growing preference for regional flavours. Since Dabur has a global and regional presence, adding Badshah Masala to its kitty means that Badshah Masala is set to reach wider audiences.