Gujarat-based snacks maker Balaji Wafers Pvt. Ltd will sell a 10% stake through an initial public offering (IPO) in six months, delaying the sale until it completes work on new plants coming up in Indore, co-founder Chandu Virani said.

The company decided on the IPO about eight to nine months ago, but became busy with the construction of the new plants to manufacture potato chips and other salted snacks.

“These plans are getting delayed as the company management is busy with ongoing expansion," said Virani, adding that the company is seeking to raise 300 crore through the initial share sale.

Balaji Wafers will join at least 30 other companies that have filed their IPO documents with the market regulator to take advantage of a rebound in the market for initial share sales. Last year, 21 companies raised almost 13,600 crore through IPOs.

To fund its expansion, Balaji Wafers raised a loan of 100 crore from creditors including Kotak Mahindra Bank Ltd late last year.

“We need 225 crore to fund our expansion plans in the coming year," Virani said.

Some of the money will be coming from internal accruals.

The company expects to end the current financial year with revenue of 1,400 crore, an increase of 16.6% from 1,200 crore in financial year 2015. Net profit has been in the range 10-12% of revenue for the last five years and will be in line with that in this fiscal year as well, Virani said.

With operations limited to Gujarat, Goa, Madhya Pradesh, Rajasthan and Maharashtra, the company will use the proceeds of the IPO to expand to new markets in Central and North India and for marketing.

Even with its limited presence, Balaji has garnered a 7.5% market share by value in India’s sweet and savoury snacks market and is the largest brand nationally after Haldiram’s, and Pepisco India Holdings Pvt. Ltd’s Lay’s and Kurkure.

It is larger than ITC Ltd’s Bingo! and even Parle Products Pvt. Ltd’s chips brand Parle’s, according to data from research firm Euromonitor International.

Other food and beverage companies have tapped the IPO market to raise money for expansion, and delivered handsome returns to investors.

Last year, Manpasand Beverages Ltd, a fruit drinks maker, raised 400 crore through an IPO. The firm’s stock is trading 40% above its IPO price of 320. Manpasand has a strong presence in the northern and eastern Indian markets and caters mainly to semi-urban and rural areas.

In the last 12 months, listed regional snacks maker DFM Foods Ltd has seen its share price triple to 914 as of 18 January. On Monday, DFM shares fell 4.61% to close at 890.50, while the benchmark Sensex closed at 24,188.37, falling 1.09%.

DFM Foods sells snack foods under the brand Crax and primarily caters to north, west and central India.

Bankers say that public market investors will be keen to invest in regional food and beverage companies with strong brands such as Balaji.

From an investor’s point of view, such businesses are good bets, said Munish Aggarwal, director at investment bank Equirus Capital.

“Regional snack makers have inherent strengths in distribution and given their low overheads they are very nimble on their pricing strategy, making it difficult for larger established national players to compete with them," he said.

Such businesses, which are highly profitable, generate strong cash flows and have strong brands, will find it easy to attract investors, he added.

In the last few years, regional snack makers have bet big on the Indian consumption story and expanded rapidly to tap rising demand.

“Increasing disposable incomes, a need for convenience from fast-paced lifestyles and a cultural tradition of snacking between meals have fuelled explosive growth in this sector," said a November 2014 report by Nielsen India.

According to the report, sales in the snacks category grew almost six-fold from 8,000 crore in 2004 to 47,000 crore in 2013.

The growth of the industry has attracted several private equity (PE) investors.

In March 2014, PE fund Lighthouse Funds invested 125 crore in Bikaji Foods, while in January 2014, WestBridge Capital Partners picked up a 25% stake in DFM Foods for 64.5 crore.