Prataap Snacks’ shares surged more than 14% on February 22 after reports surfaced suggesting that FMCG major ITC Ltd was looking to buy a major stake in the snacks food company.

Prataap Snacks’ shares hit an intraday high of Rs 1,344.65, 14.28% higher than its last closing price on the National Stock Exchange (NSE). The stock closed 4.2% higher at Rs 1,226.00. 

According to media reports, people with knowledge about the matter said that ITC is considering acquiring a 47% stake held by Peak XV Partners in the Indore-based Prataap Snacks. Following a successful stake sale, an open offer for an additional 26% could be seen. 

Earlier in December, promoters of Prataap Snacks were in discussions with Haldiram’s to sell a controlling stake in the snack maker, but the deal fell through to a valuation mismatch. Similarly, negotiations with Bikaji Foods also did not materialise. The reports of ITC purchasing a stake are not been verified yet. 

The acquisition move is seen as a strategic step by ITC to leverage its strong distribution network and expand its presence in regional markets, strengthening its position in the market.

Prataap Snacks sells traditional Indian namkeens under its brand, Avadh, and makes the Yellow Diamond Chips.