Sadananda Maiya, the founder of food and beverages brand Maiyas, has stopped the production due to a breakdown in the business relationship with private equity investor Peepul Capital. He used to sell the storied food MTR Foods.
Bengaluru-based Maiyas Beverages and Foods has over 350 staff, is disturbed as the founder seeks to walk away from the business after not being able to get along with Peepul Capital. The only other option for Maiya is to find a new investor.
After this, the products of Maiyas like snacks, instant mixes and ready to cook categories are now out of stock across the southern market due to the dispute. This is the latest blow-up between private equity investors who are long-term risk capital providers and traditional Indian business families, many of which landed in courts or ended in distress sales, reported TOI.
Maiya family own 40% stake, while 30% stake is owned by Peepul Capital and Ascent Capital. Maiya initially raised funds from Ascent Capital and later from Peepul, both investors invested Rs 280 crore till date. Maiya's equity contribution was in the range of Rs 50-70 crore. The company had hired professional management was tracking an annual revenue run rate of Rs 300 crore, which is a big leap from Rs 125-crore revenue reported in FY16.
Its a classic case of communication breakdown between a sentimental, and at times unpredictable, Indian family businessman and a control investor, said one of the sources.