Blue Chip
Forbes India|February 26, 2021
How the Rajkot-headquartered Balaji Wafers built formidable fortresses in four states that national foods giants haven’t yet been able to breach
RAJIV SINGH

2014, RAJKOT (GUJARAT)

The chips were heavily stacked against Chandubhai Virani. And he knew it. On one side of the table was Balaji Wafers, a homegrown snacks maker that had hustled over three decades to clock ₹1,000 crore revenue in 2014. Chandubhai and his brothers—Bhikhubhai and Kanubhai— started Balaji Wafers by making potato chips from a small room in Rajkot in 1982. At the other end of the table was the Goliath, a multinational snacks and beverage maker, multiple times the size of Balaji.

The foreign company played its cards. The offer on the table for the Virani brothers was over ₹4,000 crore for selling out. “It was a lot of money,” says Chandubhai, but he was not surprised.

For the snacks industry, 2014 had started on a crispy note. In January, WestBridge Capital Partners picked up a 25 percent stake in DFM Foods reportedly for ₹64.5 crore. The Delhi-based company, which had blockbuster ring brand Crax, primarily catered to markets in north, west and central India. Two months later, private equity fund Lighthouse bought around 12 percent stake in the Rajasthan-based Bikaji Foods. The suitors were on the prowl.

Back in Rajkot, Chandubhai was not impressed or overawed by the offer. “I have never feared anything or anybody,” says the founder and director of Balaji Wafers. “If they thought they could intimidate me with their size, they were wrong.” And he had the wind in his sales. Balaji had emerged as the biggest wafers brand in Gujarat and Rajasthan, and was among the top three in Maharashtra and Madhya Pradesh.

The perception in Rajkot, though, was different, at least among other regional brands there (including Rajasthan). One of them called up Chandubhai and impressed upon him the need to sell. “You know, companies are like daughters. After a particular age, you need to get them married, and send them to their new home.” Chandubhai stayed stoic. “This company is my daughter and my son. And I don’t sell my family,” was his retort. The offer was nipped in the bud, and the Virani brothers, along with the second generation, got back to work.

Six years later, a lot has changed. Balaji is the undisputed leader in four states and present across 11, and in the midst of a pan-India push. And revenue almost doubled to ₹2,374 crore in this period (till FY20).

What persists is the stubbornness and passion of Chandubhai to keep building the company, and not to sell out or even dilute the family’s holding. “Why an IPO?” he asks. “I don’t need money. I never needed it.”

Back in 1974, when the Virani brothers were forced to migrate from their village in Jamnagar and come to Rajkot in search of a job, all that they wanted was a ‘name’ for themselves. “We never left our homeland in search of money,” says Chandubhai. Due to paucity of rain, his father sold the parched land and gave ₹20,000 to his sons to start a new life by moving out of the village. The trio started a small venture in agricultural products and farm equipment in Rajkot. It flopped after two years, and the brothers started working in Astron Cinema’s canteen. “My salary was ₹90 per month,” Chandubhai recalls. “And in 2014 I was offered ₹4,000 crore to sell my company,” he laughs.

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