The scope of how global private equity giants are expanding in India and are tapping smallest to smallest businesses is just amazing. After going through the investment rounds of technology companies, consumer services, restaurants, healthcare service providers and detergents in top of the mind recall sectors, Sequoia India is understood to have now zeroed on a business which is into ready-to-cook idli and dosa batter. Started by a IIM-B graduate - Musthafa P C, during early 2005, Best foods Enterprises manufactures and markets the ID Special food products. Starting with batter for idli and dosa, the company now makes and markets several other products like Kerala parota, wheat parota, achappam (rose cookies), pettiappam (diamond chips) and aappam under the ID Special brand name, besides a whole host of ready-to-eat chutneys besides dry fruits.
It is understood that Sequoia is looking to invest between Rs 20-30 crore in this venture within March 2013. Musthafa declined to comment on the fund raise while Sequoia could not be reached for comments. Based in Bangalore, Best Foods derives a major share of its sales from Bangalore and has a growing presence in Mangalore, Chennai, Hyderabad, Mumbai, Dubai, Mysore, Trichy and Kanchipuram. Best Foods has been growing rapidly and its present revenue run rate is at Rs 30 crore a year on an operating margins of around 24 per cent. On an average, Best Foods churns out a phenomenal 24,000 kgs of batter on a daily basis, which sells at an average of Rs 40 a kg. “I felt there is a good space for an organised player to be in this market. In Bangalore, we have around 80 per cent of the marketshare, while in Chennai we are growing at a rapid pace,” Musthafa told Business Standard.
The story of Musthafa is that of one fighting against all odds and emerging into a successful entrepreneur. Son of a village labourer, he did his engineering and then went on to IIM-B. Post that, he worked with a couple of global corporations and then the entrepreneurial urge took over, and he started Best Foods along with his cousin. Best Foods employs close to 150 people, has a plant at Hoskote near Bangalore and is looking to grow aggressively by tapping the north and western Indian markets pretty soon.