27-05-2014, 12:56 PM
A study on Capital Structure Production Based Company
INTRODUCTION
Balaji wafers pvt. Ltd is sinuously with crunchy and tasty snacks. Like most successful ventures, it had a modest beginning at the canteen of astron cinema in Rajkot. From there began the journey that led to the production of month watering namkeen that has won the hearts of food lovers in Gujarat, maharastra and rajasthan. Balaji products are unparalleled in taste treshness and quality.
The virani brothers meghjibhai, Bhikhabhai, Chandubhai and Kanubhai are the pillars of balaji empire. They started the business with united investment and indigenous trying methods and now have a tally automatic plant, the first of its kind in Gujarat.
Currently the company is no-1 in wafer production and sales. Its biggest tally automated potato processing machinery plant can process 4500kg potatoes and make 1200kg chips per hour.
A study on Capital Structure and its importance of financial market
Balaji, based in Rajkot in western India, manufactures and distributes potato chips and other grain-based bagged snacks in flavours such as masala.
Chief executive officer Indra Nooyi has tried to wrest a greater share of snack markets in developing countries by appealing to local tastes.
The Purchase, New York-based company has added more spicy offerings and recruited Bollywood actors as brand ambassadors to get a greater share of India’s snack market, which Euromonitor Plc projects will be worth Rs.268 billion ($4.2 billion) by 2018.
“The Virani family plans to sell up to a 49% stake for as much as $300 million”, people familiar with the matter said.
Jeff Dahncke, a spokesman for PepsiCo, declined to comment.
Balaji is seeking a partner who will invest funds and help it expand operations, founder and managing director Chandubhai Virani said in an interview.
Meaning of Capital Structure
Snack maker Balaji Wafers is in separate talks with private-equity funds, including Blackstone Group and Actis, to raise between $100 million and $125 million, two sources with direct knowledge of the matter told Reuters.
The company has hired EY to find an investor, said the sources, who declined to be named as they were not authorised to speak to the media.
A mix of a company's long-term debt, specific short-term debt, common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds.
Debt comes in the form of bond issues or long-term notes payable, while equity is classified as common stock, preferred stock or retained earnings. Short-term debt such as working capital requirements is also considered to be part of the capital structure.
Advance and disadvantages of companies
Balaji, based in Rajkot in western India, manufactures and distributes potato chips and other grain-based bagged snacks in flavours such as masala.
Chief executive officer Indra Nooyi has tried to wrest a greater share of snack markets in developing countries by appealing to local tastes.
The Purchase, New York-based company has added more spicy offerings and recruited Bollywood actors as brand ambassadors to get a greater share of India’s snack market, which Euromonitor Plc projects will be worth Rs.268 billion ($4.2 billion) by 2018.
“The Virani family plans to sell up to a 49% stake for as much as $300 million”, people familiar with the matter said.
Jeff Dahncke, a spokesman for PepsiCo, declined to comment.
Balaji is seeking a partner who will invest funds and help it expand operations, founder and managing director Chandubhai Virani said in an interview.
our goal has always been to make good quality products that are cheap,” Virani said.
“Right now we don’t produce enough to meet the demand.”
“Sales have been growing at 25% annually and reached Rs.10 billion last year,” Virani said. “The entire company is worth about Rs.40 billion ,” he said.
Per-capita consumption of salty snacks in India is a fraction of that in Mexico, one of PepsiCo.’s biggest snack markets, according to a February presentation by the maker of Mountain Dew and Quaker oats.
SOLUTION FOR BETTER CONDITION, PERMITS
The company has hired EY to find an investor, said the sources, who declined to be named as they were not authorised to speak to the media.
Chandu Virani, managing director of Balaji Wafers, confirmed that the company was in talks with private-equity investors, but declined to give details.
"We are looking for growth capital investment and are in talks. I cannot give further details or a time frame," Virani told Reuters.
He said Balaji Wafers is the No.1 maker of savoury Indian snacks, called 'namkeen', in the western states of Gujarat, Maharashtra, Rajasthan and Madhya Pradesh.
Blackstone and Actis declined to comment.
Private equity investments in India were up 17.7 percent to $2.3 billion during the second quarter of this year compared to the same period last year, according to Venture Intelligence, an industry tracker.