Mumbai: JM Financial-backed Zoff Foods is exploring a minority stake sale to raise growth capital in a deal that could value the spices and seasoning company at over ₹1,000 crore, two people familiar with the matter said.
The deal was launched recently, and the discussions are still in an early stage with details on the amount of capital raise and valuation expected to evolve in due course. The company has hired EY as financial adviser and the transaction could go up to a significant minority stake, the people said, requesting anonymity.
The Raipur-based company will look to tap both private equity (PE) firms and strategic investors including ITC, Emami and Orkla India for the funding round, they said.
Strategics are increasingly open to acquiring small stakes as they pursue exposure to fast-growing assets that would otherwise take them longer to scale organically, the first of the two persons cited earlier said. Zoff Foods is expected to use the fresh capital to expand product line and geographical reach, and the induction of a strategic partner may likely give it the necessary distribution access.
In the current fiscal year, the company is expected to clock about ₹200-250 crore in annual recurring revenue and turn Ebitda-positive by the fourth quarter, the second person said. This person added that existing investor JM Financial Private Equity, which owns a 20% stake, could sell a part of its holding depending on whether the valuation is attractive.
Ebitda is short for earnings before interest, taxes, depreciation and amortization.
If the deal goes through, the company will explore an initial public offering (IPO) with further scale, the people said. ITC said it doesn’t comment on market speculation, while emails sent to Zoff, Orkla India, EY, JM Financial and Emami did not elicit a response till press time.
In the mix
Founded by brothers Akash Agrawalla and Ashish Agrawal in 2018, Zoff has grown into one of India’s leading spice brands, offering a wide range of products including whole spices, powdered spices, blended spices, dry fruits, five-minute gravy and marinade mixes. The company is known for using India’s first cool-grinding technology, which maintains the natural flavour, aroma and nutrients of the spices, according to its official website.
Over the past two years, the company has been on an expansion spree. It entered DMart and modern trade, forayed into kitchen essentials, and added dry fruits and other products to its portfolio. Its newer categories include seasonings, marinade mixes and ready-to-cook gravies.
Asquare Foods and Beverages Pvt. Ltd, which operates Zoff, raised ₹40 crore from JM Financial Private Equity in 2024 to strengthen brand-building, expand capacity and improve its offline distribution network. Earlier this year, the investment firm doubled down through a further ₹18.5 crore capital infusion into Zoff.
Zoff has expanded rapidly across major e-commerce and quick-commerce platforms, driving a 40% compound annual growth rate in overall revenue over the past four years, the company said during its fundraise announcement. Nearly 25% of the direct-to-consumer (D2C) firm’s sales came from quick-commerce platforms.
Over the years, it has differentiated itself by using a multi-layered zip-lock packaging to keep the spices fresh for a long time. It has a pan-India footprint with plans to further expand its reach to tier-II and III towns by leveraging the increasing penetration of e-commerce and quick-commerce platforms.
In FY25, Asquare reported a revenue from operations of ₹102.7 crore compared with ₹92.6 crore a year earlier. Its net loss widened to ₹17.4 crore from a profit of 20 lakhs in FY24, according to the company’s filings with the ministry of corporate affairs, sourced by Tofler.
Zoff competes with legacy giants, regional category leaders and new-age D2C brands in the Indian packaged spices and food products market. They include IPO-bound Pushp, Everest Food Products, MDH Spices, Badshah Masala and MTR Foods, among others.