In today’s Finshots, we tell you why private equity and FMCG giants are queuing up for a stake in Balaji Wafers.

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Now, onto today’s story.

The Story

Balaji Wafers is an oddity. Its story begins in 1974 with a cinema canteen counter in Rajkot, where Chandubhai Virani noticed that fried chips were selling faster than sandwiches that went soggy. And moviegoers weren’t satisfied with the canteen wafers either. That’s when he started frying his own chips “Balaji Wafers”, which brought in long queues.

And the rest is history. What began as a backyard hustle became an automated factory in 1995, and today it clocks nearly ₹5,550 crore in FY24 sales and ₹578 crore in profits, almost neck-and-neck with Jubilant FoodWorks, a listed food giant worth over ₹43,000 crores. Which is why private equity firms and FMCG biggies like Temasek, ITC, General Mills and PepsiCo are circling a 10% stake deal that pegs Balaji at ₹40,000 crores.

But how exactly did a regional player from Gujarat reach the same table as global titans?

Well, the answer lies in how it cracked each step of the wafer journey, right from the farm to the kirana shelf.

You see, snacking is a tricky business. Especially chips, which make up a nice chunk of Balaji’s products. You’re dealing with perishables and their prices fluctuate a lot. Then you need to crack pricing that’s competitive. The quality matters too – which potatoes you use, how they’re cut and processed and how they’re packed. And even when you get these things right, distribution remains a tough nut, with many regional as well as giants entrenched in the market.

So, the profitability quite depends on:

1. keeping the ₹5/₹10 price points sacred
2. varying grammage to ride inflation, and
3. moving tonnage through kiranas faster than competitors can refill their shelves

But Balaji cracked it all. Some by doing different things, some by doing things differently.

So let’s start with raw materials and wafer physics.

The starting point to make chips is messy. Potatoes aren’t interchangeable. For wafers, you need low-moisture, high-solid varieties that don’t wilt in storage or turn brown in the fryer. That’s why PepsiCo spent years engineering its FC5 variety in India — a low-moisture variety bred specifically for chips, and contracted thousands of farmers under strict buy-back agreements.

Balaji had no such R&D muscle. Instead, it went the local way. It leaned on Gujarat’s potato belt and gradually built ties with farmers — from about 400–600 contract growers a decade ago to a broader network of 2,000 suppliers today, 80% of them farmers. To back that up, it invested in a 10,000-tonne cold storage facility so it could buy in bulk at harvest and stretch supply through the year. And the result was a procurement model that made its supply behave more like a factory line than a crop cycle. Which meant stable quality, lower wastage, and resilience when potato prices swung wildly season to season.

But farming’s just the start. Once the spuds are peeled, sliced, fried and seasoned, you still need to squeeze every rupee out of the supply chain. Oil alone makes up 25–30% of raw material costs, and when edible oil prices shot up in 2019, the shock hit most players. Balaji’s answer wasn’t to touch the sacrosanct ₹5 and ₹10 MRPs. Instead, it played the fine game of grammage and scale. For perspective, a ₹10 pack of Balaji’s salted chips has at times carried 35 grams versus Lay’s 23 grams — a “more chips, less air” contrast that Balaji even ran ads on. So to the consumer, the value equation never broke. Trust was preserved, and that perception of “more for your rupee” became Balaji’s moat. While rivals splurged on advertising, Balaji simply taught people to trust the weight in their palm.

But this perception also needed a distribution muscle.

So Balaji followed a D-Mart style playbook: saturate one geography before expanding next door. Gujarat first, then Maharashtra, Rajasthan, and Madhya Pradesh. Adjacency meant shorter truck routes, localised flavours, and faster word of mouth. And behind this was a dense network: over 1,200 distributors and 1,300 dealers, supplying to 4.5 lakh kiranas. It even reportedly dabbled in guerrilla marketing — from plastering kirana walls with Balaji logos to allegedly employing people to walk into stores and ask for its wafers by name. And while rivals like ITC and PepsiCo routinely spend 8–12% of sales on advertising, Balaji kept spends at just 2% to 4%. It let distribution, visibility, and word-of-mouth do the heavy lifting.

The result was dominance. Today, it has close to 65% market share in chips, namkeen and bhujia in Gujarat, Maharashtra, and Rajasthan. Nationally, it has leapfrogged brands like Bingo and Uncle Chipps to become the third-largest namkeen (salty snack) brand, behind only PepsiCo and Haldiram’s, with about a 12% share of India’s ₹43,800-crore market.

Of course, it wasn’t all smooth frying. PepsiCo dragged Balaji to court in 2013, alleging its packs looked too much like Lay’s. And in 2018, the Bombay High Court restrained Balaji from selling its “Rumbles” ridged chips, ruling they resembled Lay’s Maxx design.

For most regional players, that would’ve been fatal. Packaging is a battlefield in FMCG, where shoppers decide in seconds and changes in color and fonts can make a huge difference. But Balaji bet that consumers weren’t loyal to design quirks, they were loyal to the “Balaji” name. And so it overhauled packaging, doubled down on distribution, kept the price-value promise intact… and it came out stronger. Sales climbed, while Lay’s actually ceded share in Gujarat and Maharashtra.

Oh and PepsiCo wasn’t just fighting Balaji. In 2019, it sued Gujarat farmers, demanding ₹1 crore each for cultivating its FC5 potatoes without licence — a battle it later withdrew after public backlash. Balaji, which sourced openly from local farmers, looked like the underdog champion of the agrarian side.

And by the 2020s, its plants were processing about 1 lakh kg of potato wafers and 5 lakh kg of namkeen every single day, a capacity that silently compounded. And as it scaled, it never lost its flair for localisation. A masala mix that works in Surat might not click in Kota, so recipes were tweaked region by region. The entry ladder of ₹5 and ₹10 stayed sacred, but family packs offered a way to trade up.

And that’s how, over time, Balaji built 65+ products across wafers, namkeen, extruded snacks, and noodles.

But here’s the real question. Can authenticity survive scale?

Turning a regional wafer king into a national FMCG play requires moves that risk eroding the very magic that built it. You need to standardise SKUs to unlock logistics, which flattens local taste. You need to ramp up advertising to win modern trade and quick-commerce shelves, which bloats costs. And you need premium variants to please investors, which risks alienating the ₹5/₹10 loyalists.

There’s also competition from local players. And if investors are onboard, the brand will have to scale. Maybe even think about an IPO so they get an exit.

The salty snacks market, after all, is booming and growing in double digits. Rivals are formidable from Lay’s with global R&D, ITC with deep pockets, Haldiram’s with national scale, Prataap Snacks and countless local challengers. Balaji has held them off in its strongholds, but national expansion will demand moves that could dull its local edge.

But as we’ve seen, this isn’t a company that's stopping. And it’s already testing its bite beyond wafers by giving established players a tough fight in the noodle aisle with its Gippi Masala Noodles.

And perhaps that’s why everyone wants in. They probably know that Balaji offers a few things money can’t easily buy: credibility at the kirana counter where shelf space is earned, not bought; the sanctity of the ₹5/₹10 grammar without bleeding margins; and a flavour engine that knows how to tilt masala across regions. Plus, it’s also the last big regional gatekeeper left. Building another Balaji from scratch would take a decade — and far more capital than anyone admits.

Which means the real bite is yet to come. India’s snack market is only going to get bigger (more than double to over ₹95,000 crores by 2032 as per estimates), and if Balaji can stretch its magic beyond the existing states and newer global geographies, it won’t just stay the last great regional player but could in fact be another true homegrown challenger to the multinationals.

Until then…

If this story helped you get a taste of the snacking game and Balaji Wafers, why not share it on WhatsApp, LinkedIn, and X so more people can crunch into the chips business too?