Haldiram's, an Indian snack maker, is in talks to acquire a controlling stake in listed rival Prataap Snacks for $350 million to extend its foothold in the potato chip industry, according to two people with direct knowledge of the subject. The discussions are in their early stages, and a valuation has yet to be determined, albeit it may be higher than Prataap's stock price. Haldiram is looking for a controlling interest of at least 51%, but no final figure has been established, according to sources who declined to be named since the conversations are private. 

Prataap is best known for its Yellow Diamond brand of chips, which competes with Pepsi's Lay's and other snack manufacturers in a market where small, unorganized food merchants continue to dominate the fried chip category. Peak XV Partners, formerly Sequoia Capital India, controls approximately 47% of Prataap Snacks and intends to sell their whole position in the company, according to sources.  

Haldiram's CEO Krishan Kumar Chutani, Prataap CEO Amit Kumat, and Peak XV declined to comment. Prataap made its stock market debut in 2017 and reported yearly revenues of roughly $200 million last year. It claims to sell over 12 million packets of its salty snacks daily, at prices as low as 5 rupees (6 US cents). 

However, unlisted Haldiram's, a family-run firm started in 1937, is a significantly larger manufacturer of packaged snacks, with over $1 billion in revenue and 150 locations around the country. Last year, Reuters reported that the company was negotiating a $10 billion value with conglomerate Tata Group and other strategic investors, but the talks fell through due to valuation concerns.  

"A contract (with Prataap) will enable Haldiram's to enter the potato chips market. Consumers frequently prefer western-flavored snacks to local ones," According to one of the sources. Prataap operates 14 manufacturing factories in nine Indian states. Though smaller unorganized enterprises dominate India's fried snack landscape, branded items have grown in popularity in recent years as customers became more health-conscious and had more disposable cash to spend on packaged goods.