Manmohan-era retail firm that fuelled Chandrababu Naidu’s wealth

Over 82 per cent of Rs 931 crore wealth attributed to Andhra Pradesh Chief Minister is due to his family's shares in Heritage Foods, say company officials

Amaravati: About 82 per cent of the Rs 931 crore wealth attributed to Andhra Pradesh Chief Minister N Chandrababu Naidu is on account of his family’s shareholding in a dairy product retailing firm that was set up soon after Manmohan Singh opened up the Indian economy more than three decades ago, company officials said.

While Naidu does not own any shares in Heritage Foods Ltd – the milk and dairy product retailer set up in 1992 and listed on bourses in 1994, his wife Bhuvaneswari Nara owns a 24.37 per cent stake whose worth of about Rs 763 crore is counted as the Andhra Chief Minister’s wealth.

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Naidu has been in a report of the Association for Democratic Reforms (ADR) touted as the richest Chief Minister with assets worth over Rs 931 crore. Explaining the context, Heritage Foods officials said the company is a pure-play daily product retailer and not in any crony capitalist sector like infrastructure.

A retail firm, which does not get any government subsidy or other support, can only grow if its products are accepted by masses. And this company was set up when Naidu was just an MLA. He became chief minister of the State after the firm got listed on stock exchanges.

They said in the early 1990s Naidu’s home district of Chittoor in united Andhra Pradesh was the State’s largest milk producing district. In 1992, there was a milk surplus and there was a marketing crisis for the milk farmers.

And the then finance minister Manmohan Singh liberalised the economy in 1991-92, opening up several sectors for private capital. The dairy sector too was liberalised and private entrepreneurs were encouraged to invest in milk processing and marketing.

Spurred by this opportunity, Naidu set up Heritage Foods in 1992 with an initial capital of Rs 50 lakh and set up Heritage Food’s first milk chilling unit in Chittoor. For this, loans were taken from Bank of Baroda, they said adding Naidu was the managing director of Heritage Foods for two years.

When Naidu became a minister for the first time in 1994, he quit the post and his wife became an executive director and subsequently managing director.

Heritage Foods went public in 1994 and had a market capitalisation of Rs 25 crore when it was listed in 1994. The mcap rose as the company grew. Loans taken from Bank of Baroda and other nationalised banks towards expansion activities were paid back and post COVID, Heritage Foods was declared a debt-free company, they said.

At present, Heritage Foods has a total market value of Rs 4,400 crores, revenues of Rs 3,750 crores, and operates in 12 states of India. It has an asset value of Rs 600 crores. It is well regarded for quality dairy products, and distribution is their strength.

The business is managed by Bhuwaneswari Nara who is Managing Director, and Nara Brahmani (daughter-in-law of Naidu) who is executive director for the last 10 years. Brahmani, wife of Nara Lokesh, is a graduate of Stanford business school who has worked in leading global dairy companies.