James Murdoch and Uday Shankar's investment firm, Bodhi Tree, is making its first major move into the food sector by acquiring a majority stake in Adyar Ananda Bhavan (A2B), a well-known Indian sweets and snacks chain. The $180 million deal values the 50-year-old business at roughly $350 million, according to the companies.
A2B, which started as a small shop in Chennai, has grown into a sizable operation with 160 outlets in India and more than 30 abroad, employing about 15,000 people. But despite its scale, the company's profitability has been thin. For the year ending March 2025, A2B's India entity reported sales of 14.87 billion rupees (about $158.8 million) and a net profit of just 362 million rupees (about $3.9 million). That translates to a net margin of roughly 2.5%, leaving little room for error.
Why the deal is about fixing the machine
The investment is not just about adding more stores. Bodhi Tree and A2B's co-founders have framed the partnership as an IPO-readiness project. The goal is to standardize operations, tighten purchasing and processes, and demonstrate that growth can come with better profitability, not just more locations.
For a company with A2B's scale, even small improvements in efficiency can have a big impact on the bottom line. If Bodhi Tree can professionalize the chain—think more consistent store-level economics, tighter procurement, and repeatable processes—then earnings can rise even if the store count doesn't change much.
This is a common challenge for family-run businesses that have grown organically over decades. Many lack the formal systems and governance that public-market investors expect. Bodhi Tree's involvement is likely aimed at bringing that structure, with Uday Shankar set to chair A2B's new board.
What it means for investors
For public-market investors, A2B's eventual listing will hinge on proving that it can turn revenue into profit reliably. The company's current financials show a business that is more about fixing the machine than fast growth. If Bodhi Tree succeeds, the valuation could look attractive; if not, the thin margins could remain a concern.
The deal also highlights the broader appetite for Indian snack brands. Singapore state investor Temasek has valued Haldiram's, another major Indian snacks player, at around $10 billion, showing that the market is willing to pay up for scaled brands that look IPO-ready. This context suggests that A2B's $350 million valuation is a bet on its potential to improve profitability and governance, not just its current earnings.
For everyday investors, this deal is a reminder that private equity and venture capital often buy businesses with the intention of professionalizing them before taking them public. When such companies eventually list, the improvements made during the private phase can be a key driver of returns. However, there are no guarantees, and the success of this strategy will depend on execution.
Bodhi Tree, which was co-founded by Murdoch and Shankar in 2022, has focused on investments in media, technology, and consumer sectors. This foray into food marks a new direction for the firm, but it aligns with its broader strategy of backing businesses with growth potential in India's expanding consumer market.
As A2B works toward a potential listing, investors will be watching closely to see whether the company can deliver on its promise of better profitability. The next few years will be critical in determining whether this sweet-and-snacks chain can turn its scale into a recipe for success in the public markets.
