Apax Funds buys minority stake in iD Fresh Food, early backers part exit

Global private equity firm Apax Funds has acquired a significant minority stake in iD Fresh Food, which produces ready-to-cook packaged food products.

In a statement made on Monday, it was stated that the investment company purchased its shares from existing shareholders Premji Invest and TPG NewQuest, and both of them, along with its co-founder PC Musthafa and his cousins, will continue to support the company. Financial terms of the transaction were not disclosed.

Also Read | Not all beer is tea: Why herbal and rooibos don’t work

Mint Apax’s interest in investing in iD Fresh was first reported in November. The report emphasized that the private equity firm, among others, was in talks to purchase approximately 30% shares. ₹1,200 crore in the company. The deal was expected to value total assets ₹4,000 and ₹4,500 crore.

Apax partner Rohan Haldea said the latest investment will support i-D’s next phase of growth in India and internationally.

“Apax Funds’ investment will enable us to accelerate growth, build capacity, expand our product range and scale to more cities and markets,” Musthafa said.

This comes at a time when the convenience market is proving difficult to crack, amid intense competition and India’s strong preference for fresh, home-cooked meals.

Also Read | Hungry for growth, iD Fresh is on the hunt for its next blockbuster

“We will work closely with the management team and leverage our consumer packaged goods expertise to accelerate growth, including expanding distribution to new cities and channels, strengthening the brand through marketing and category creation, driving innovation in adjacent product categories, and using technology and analytics to optimize the company’s fresh, daily-delivered supply chain,” said Harjot Dhaliwal, partner and head of India at Apax.

Founded in 2005 in Bengaluru, iD Fresh started with the aim of offering fresh, preservative-free, traditionally prepared Indian food on a large scale. The company has a daily, direct-to-retailer cold chain model, starting from origin where idli/dosa batter is supplied to local retailers, allowing for clean label fresh products with a five to seven day refrigerated shelf life.

Over the years, iD Fresh has scaled to 50+ cities across India and the Gulf. The company also claims to be India’s largest ready-to-cook fresh food brand and category leader in branded dough, with an estimated 50-60% share in its major categories. Its portfolio includes idli/dosa batter, Indian flatbreads, accompaniments like chutney and sambar, and value-added dairy products.

Also Read | Food distribution sees 27% increase in employment, but experts highlight a hidden malaise

In the next fiscal year, the company expects further growth through deeper penetration of domestic and international markets, new product innovations, accelerated channel expansion and increased consumer preference for fresh, convenient, clean-label food solutions, the company said in a statement.

With double-digit EBITDA (earnings before interest, taxes, depreciation and amortization) margins, ₹Profit of ₹4.5 crore was made in FY24; This is the first time this has happened since its founding. The company’s profits increased the following year ₹25.87 crore as their revenue increases ₹681.37 crore onwards ₹557.84 crore in FY24, according to Entrackr report.