Startup Deep Dive : Yellow Diamond (Prataap Snacks) — a stressed-loan investor now controls the maker of India’s Rs 5 snack

In September 2024, a Mumbai-based lender best known for buying up stressed loans agreed to pay ₹846.6 crore for a snack company most metro shoppers had never consciously registered. Two years on, that lender, Authum Investment & Infrastructure, controls close to half of Prataap Snacks, the maker of Yellow Diamond puffs and rings, even as the company itself swung from a ₹34.27 crore loss in one financial year to a ₹9.72 crore profit in the next.

Yellow Diamond is not a metro brand. It was built by a man who had already failed three times, on the insight that Delhi’s cheese-ball fad could be sold cheaper and heavier, five rupees at a time, in towns the big snack companies had not bothered to visit. That single idea, and the empty trucks that carried it home, turned into a listed company with 150-plus SKUs, a national distribution footprint, and, now, a new owner with no background in food.

Quick facts

What they do

Prataap Snacks makes and sells packaged snack food under the Yellow Diamond brand, sold mostly through small kirana stores at low, fixed price points rather than through modern trade or e-commerce. Its core buyer is a value-conscious shopper in a small town or a semi-urban neighbourhood, someone picking up a ₹5 pack on impulse rather than planning a grocery run. The company’s largest category is extruded snacks, cheese balls, rings and puffs, alongside potato chips, traditional namkeen, and a newer line of sweet snacks and “better for you” protein puffs aimed at a slightly more premium, health-aware buyer.

The origin

Amit Kumat had already failed three times before he found the idea that worked. His earlier venture, in chemical manufacturing, left him with roughly ₹6 crore of debt, according to a joint profile of his career by DNA India and the Substack newsletter Readon. In 2004 he started again, from a 100-square-foot room in Indore, with his brother Apoorva Kumat and their friend Arvind Mehta, under the name Prakash Snacks.

The insight was narrow and specific rather than grand. Cheese balls were already popular in India’s big cities, but no major snack company had bothered to bring them, cheaply and in volume, to Tier-2 and Tier-3 towns. Kumat’s answer was to sell more product for the same ₹5 that a shopper in Indore or Bhopal was used to paying, undercutting the unit economics that national brands built for metro shelves. He also cut his own logistics cost by using trucks that would otherwise have returned empty from Delhi, a detail both DNA India and Readon cite as central to how a small regional player could compete on price against far larger rivals. By 2012, that formula had built a business doing about ₹172 crore in annual revenue, and had attracted its first institutional backer.

The struggle years

The company’s growth was not a straight line. An early attempt to sell a salty snack-ring product in Delhi flopped outright; the same product, repositioned, became what Readon describes as “a super hit” after the company’s 2011 acquisition of the regional namkeen brand Avadh, but only once it was pushed into North-East India instead, a market the founders had not originally targeted. It meant standing up new capacity in an unfamiliar region to chase demand nobody had planned for.

A second, more structural stress test came with the COVID-19 disruption. Yellow Diamond’s entire model rests on an impulse purchase at a school gate, a bus stand or a neighbourhood store, the kind of low-friction, low-price transaction that shut down almost completely when schools and small retail closed. Unlike a packaged-food company selling through supermarkets and home delivery, Prataap Snacks had built its business precisely where footfall collapsed hardest, per Readon’s account of the period.

A third setback was more recent and more expensive: a fire at the company’s Jammu manufacturing facility in the third and fourth quarters of FY25, which an equity-research review of its filings by Exencial Research Partners links to an exceptional charge of roughly ₹34 crore, a number that lines up almost exactly with the company’s full-year FY25 net loss of ₹34.27 crore reported for that year. A single plant fire, in other words, appears to explain most of a year in which an already-thin business turned unprofitable.

The turning point

The clearest inflection point in Prataap Snacks’ recent history is not a product launch. It is a change of control. In September 2024, Peak XV Partners, the renamed Sequoia Capital India, sold its entire stake, reported at 46.85% of the company, to Authum Investment & Infrastructure and the investor Mahi Madhusudan Kela for ₹846.6 crore, at ₹746 a share, according to Business Standard’s reporting on the deal. Authum itself picked up 42.31% and Kela 4.54%.

The Competition Commission of India cleared Authum’s acquisition in January 2025, and Prataap Snacks became an associate company of Authum in February 2025 following a mandatory open offer priced at ₹864 a share. That was not the end of it. Through 2026, Authum kept buying in the open market rather than stopping at the regulatory threshold: its stake moved from roughly 43% in early 2026 to 44% by 30 March 2026, 46.08% by 3 June 2026, past 47% soon after, and 48.19% by 7 August 2026, per a run of exchange-disclosure reports carried by Whalesbook and ScanX Trade.

The boardroom followed the money. On 1 August 2026, Arvind Mehta, one of the three founders and the company’s chairman, resigned from that post; the board named co-founder Apoorva Kumat as the new chairman and reconstituted five board committees the same day, while independent director Chetan Kumar Mathur also stepped down, per ScanX Trade and Whalesbook filings-based reports. A company that Sequoia had backed since 2011 and that its founders had run since 2004 was, by late 2026, majority-influenced by a financial holding company with no snack-food business of its own.

The money behind it

• 2011: Sequoia Capital (later Peak XV Partners) made its first institutional investment of about $30 million, per Readon’s account of the company’s history, ahead of the brand’s national scale-up.
• Pre-IPO: the company raised a further $7.8 million in a pre-IPO round, per DealStreetAsia’s reporting on the raise.
• By the time of the IPO, Sequoia’s three funds together held about 61.58% of the company, per SPTulsian’s IPO analysis.
• October 2017: IPO priced at ₹938 a share, raising ₹481.6 crore in total (₹200 crore fresh issue plus an offer for sale), oversubscribed 47.39 times; the stock listed on NSE and BSE on 5 October 2017 at ₹1,270, a 35% premium to issue price, per Business Standard’s listing-day coverage and Chittorgarh’s IPO record.
• September 2024: Peak XV exited its entire stake (reported at 46.85%) for ₹846.6 crore to Authum Investment & Infrastructure and Mahi Madhusudan Kela at ₹746 a share, per Business Standard.
• February 2025: a mandatory open offer followed at ₹864 a share under SEBI’s takeover code, per SEBI’s own pre- and post-offer advertisements and Business Standard’s coverage.
• 2026: Authum has continued buying in the open market, taking its stake past 48% by August 2026, per a series of exchange-filing reports carried by Whalesbook and ScanX Trade.

What each backer changed: Sequoia’s early capital funded the plant and distribution build-out that took the company from a single Indore unit to a multi-state manufacturer well before it had any public listing to lean on. The IPO diversified ownership and gave Sequoia its first exit route. Authum’s 2024-26 buying spree has done something structurally different, it has moved control of a founder-run consumer brand into the hands of a listed financial investor, ahead of any stated strategic or operating plan for the snacks business itself.

How it makes money

• Money in: sale of packaged extruded snacks, chips, namkeen and sweet snacks, overwhelmingly at fixed low price points rather than variable pricing, distributed through kirana and general trade.
• Price-point concentration: an estimated 80-85% of revenue comes from ₹5 stock-keeping units, per Exencial Research Partners’ review of the company’s disclosures, a level of concentration management has previously targeted cutting from about 90% toward 70%, though that shift has been slow.
• Distribution shift: the company has been moving from a three-tier to a two-tier, more direct-to-retail distribution model, which management has said should deliver roughly 3-3.25% of structural cost savings by cutting out a layer of trade margin, per Exencial’s analysis; trade margins themselves have reportedly been rationalised from around 14% to about 10.25%.
• Margin reality versus target: management has stated an ambition of over 10% EBITDA margin, but actual margins have run well below that, collapsing to about 2.9% in FY25 (the year of the Jammu fire) from about 8.7% in FY24, and recovering only to roughly 4-5% through FY26 quarters, per Exencial’s review of reported results.
• What people get wrong: the ₹5 price point looks like a low-margin commodity business, but the real margin pressure comes less from pricing power and more from input-cost swings, palm oil and potato are reportedly the two biggest swing factors, since a fixed retail price cannot be raised quickly to offset a raw-material spike.

The numbers

Figures below are as reported for the standalone/consolidated results Prataap Snacks has disclosed to the exchanges, compiled via Screener.in and cross-checked against Whalesbook’s coverage of the FY25 and FY26 results. Unit: ₹ crore.

• FY25 loss of ₹34.27 crore came largely off an exceptional charge tied to the Jammu plant fire, alongside an EBITDA margin that collapsed to about 2.9%, per Exencial Research Partners’ review and Whalesbook’s results coverage.
• FY26 net profit of ₹9.72 crore came with a proposed final dividend of ₹0.50 a share, the board’s own signal that it viewed the turnaround as durable enough to pay out, per Whalesbook’s report on the FY26 results.
• Momentum has continued into FY27: revenue for the quarter ended 30 June 2026 (Q1 FY27) came in around ₹490.43 crore, up about 19.9% on the year-ago quarter, with net profit of roughly ₹2 crore against ₹0.69 crore a year earlier, a rise both Business Standard and Multibagg.ai’s coverage frame as more than a tripling.
• Revenue itself has been range-bound rather than compounding, moving between roughly ₹1,600 crore and ₹1,725 crore across FY23 to FY26, despite a stated management ambition of about 15% annual growth, per Exencial’s analysis.

Where the money comes from

• Extruded snacks (cheese balls, rings, puffs): the company’s founding category and, per its own investor materials, the segment where it claims a market-leading position among rings and extruded snacks.
• Potato chips: a long-standing second category, positioned by the company among the top five players in western-India savoury snacks, per its investor presentation.
• Namkeen: built out from the 2011 Avadh acquisition, now a core part of the regional portfolio, particularly strong in North-East India, a market the original product was not even designed for.
• Sweet snacks and “better for you”: a newer, smaller line, including products such as Swiss rolls, tiffin cakes and protein puffs, aimed at diversifying away from the ₹5 salty-snack dependency, per Exencial’s review of the company’s SKU mix (150-plus SKUs).
• Distribution footprint: reach of about 2.5 million retail outlets as of Q1 FY26, per Exencial’s analysis, built on a network the company had already put at roughly 5,200 distributors and 2.2 million retail touchpoints back in 2022, per Readon’s account.
• Manufacturing base: around 16 manufacturing facilities as of FY26, a mix of company-owned and third-party contract units, with recent capacity added in Jammu and Rajkot, per Exencial’s review of the FY26 investor presentation.
• The surprise: a product that failed in the company’s home market, the salty snack ring, ended up being carried by a factory build-out in the North-East, a region-first, not city-first, growth path that is the opposite of how most Indian FMCG brands scale.

The risks

• Raw-material cost volatility. Palm oil and potato prices are the two biggest swing inputs; Exencial’s review of company commentary points to palm oil spikes in the 28-43% range and potato cost swings as high as 60-78% in recent periods, and because Yellow Diamond’s core SKUs are sold at a fixed ₹5, the company cannot pass on a sudden input-cost spike the way a variably-priced product could. That mechanism shows up directly in the FY25 EBITDA-margin collapse to about 2.9%.
• Price-point concentration. With an estimated 80-85% of revenue tied to ₹5 SKUs, per Exencial’s analysis, the business has structurally limited pricing power; the stated goal of cutting this dependency from about 90% to 70% has moved slowly, leaving margins exposed each time input costs move against the company.
• Ownership and governance transition. Authum Investment & Infrastructure, a financial holding company with no packaged-food operating background, has raised its stake from roughly 42% in 2024 to 48.19% by August 2026, while the founding Mehta family’s Arvind Mehta stepped down as chairman the same month, per ScanX Trade and Whalesbook’s exchange-filing coverage. Whether the new controlling shareholder brings an operating turnaround plan for a business still running low-single-digit margins, or manages it purely as a financial holding, is not yet publicly clear.

The takeaway

Yellow Diamond’s whole first decade was won by refusing to compete where the big snack companies were strong. Amit Kumat did not try to out-market ITC or PepsiCo in Delhi and Mumbai; he took a product city shoppers already liked, made it cheaper and heavier, and drove it into towns nobody else had bothered to service properly. That is a durable lesson for any founder staring at a market that looks saturated at the top: saturation at the top does not mean saturation everywhere, it can just mean nobody has adjusted the unit economics for the next rung of geography down. The harder, less comfortable lesson sits in the company’s last two years. Winning distribution and building a plant network does not, by itself, protect margin, or ownership. A single fire and a bout of input-cost inflation were enough to erase a full year of profit, and a founder-led business that survived three decades of self-inflicted near-misses ended up ceding boardroom control to a financial investor not because it failed, but because its public float made that possible the moment its largest existing shareholder wanted out.

Frequently asked questions

Who founded Prataap Snacks and when?

Amit Kumat, his brother Apoorva Kumat and their friend Arvind Mehta founded the business in 2004 in Indore, initially as Prakash Snacks, before it was built out into Prataap Snacks Limited and the Yellow Diamond brand.

Is Prataap Snacks a listed company?

Yes. It listed on the NSE and BSE on 5 October 2017 after an IPO priced at ₹938 a share, and its market value stood at about ₹2,609 crore as of 22 September 2026.

Who controls Prataap Snacks now?

Authum Investment & Infrastructure, which bought out Peak XV Partners’ (formerly Sequoia Capital) stake in September 2024, has steadily raised its holding to 48.19% as of 7 August 2026, with the combined promoter group at 56.77% as of June 2026. Co-founder Apoorva Kumat became chairman on 1 August 2026 after Arvind Mehta’s resignation from that post.

Why did Prataap Snacks post a loss in FY25?

The company reported a net loss of ₹34.27 crore for FY25. An equity-research review of its disclosures (Exencial Research Partners) attributes most of this to an exceptional charge tied to a fire at its Jammu manufacturing facility in the third and fourth quarters of that year, on top of a sharp EBITDA-margin compression to about 2.9% driven by raw-material cost inflation.

What does Yellow Diamond actually sell?

Packaged snack food sold mainly at low, fixed price points through general trade: extruded snacks such as cheese balls, rings and puffs (its founding category), potato chips, namkeen, and a newer, smaller range of sweet snacks and protein-based “better for you” products.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Business Standard, “Authum Investment & Infra climbs 8% on CCI’s nod to acquire Prataap Snacks”, January 2025
• Business Standard, “Prataap Snacks rises 10% as Authum Invt, Mahi Kela to acquire 47% stake”, September 2024
• Business Standard, “Authum, Mahi Kela to acquire 46.85% stake in Prataap Snacks for Rs 846.6 cr”, September 2024
• Business Standard, “Prataap Snacks makes robust market debut, ends 26% up”, October 2017
• Business Standard, “Prataap Snacks gains after Q1 profit more than triples to Rs 2 cr”, August 2026
• Business Standard, “Prataap Snacks Ltd Quarterly Results” (share price and market capitalisation snapshot), September 2026
• Business Standard, “Prataap Snacks slides after Q2 PAT fall 25% YoY to Rs 5 cr”, November 2025
• Whalesbook Corporate News, “Authum Investment Ups Prataap Snacks Stake to 44%”, March 2026
• Whalesbook Corporate News, “Authum Investment Buys Prataap Snacks Shares, Raises Stake to 42.99%”, 2026
• Whalesbook Corporate News, “Authum Investment Increases Prataap Snacks Stake to 46.08%”, June 2026
• Whalesbook Corporate News, “Prataap Snacks Appoints New Chairman, Reconstitutes Board Committees”, August 2026
• Whalesbook Corporate News, “Prataap Snacks Swings to Rs 9.72 Cr Profit in FY26, Proposes Rs 0.50 Dividend”, 2026
• ScanX Trade, “Authum Investment boosts Prataap Snacks stake to 47.04% via market buy”, 2026
• ScanX Trade, “Authum Investment raises Prataap Snacks stake to 48.19%”, August 2026
• ScanX Trade, “Prataap Snacks accepts Arvind Kumar Mehta’s resignation as Chairman”, August 2026
• ScanX Trade, “Prataap Snacks: Chetan Kumar Mathur steps down as Independent Director”, 2026
• Chittorgarh.com, “Prataap Snacks IPO Date, Price, GMP, Review, Details”, 2017 (record page)
• DealStreetAsia, “India: Sequoia-backed Prataap Snacks raises $7.8m in pre-IPO round”
• SPTulsian.com, “Prataap Snacks | IPO Analysis”
• DNA India, “From 3 failed businesses to Rs 1,000 crore turnover, how Amit Kumat built one of India’s most successful snack brands”
• Readon (Substack), “The Gold Mine Called Yellow Diamond”
• Screener.in, Prataap Snacks Ltd company financials page, accessed September 2026
• ICICI Direct, “Prataap Snacks Ltd: Latest Quarterly Results Analysis”, accessed September 2026
• Exencial Research Partners (Substack), “Prataap Snacks” equity research note, 2026
• Multibagg.ai, “Prataap Snacks Q1 Results FY27: Profit up 257%, revenue +20%”, August 2026

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