Lal Sweets Private Limited is in talks to raise about $40 million from private equity investors. The potential deal values the company at $150 million - $175 million, according to three people with knowledge of the matter. The company, which sells sweets, cookies and savories, has received a term sheet from the private equity arm of Motilal Oswal Financial Services Limited (NSEI:MOTILALOFS), one of the person cited above said.

"The fund raise is a mix of primary and secondary capital, with the promoters selling some stake," the person added. The company has appointed investment bank Veda Corporate Advisors Private Limited to help with the fundraise. This is the first time the company is looking to raise external capital since its inception in 2010.

"Motilal Oswal PE is doing due diligence," the second person cited above said. While Veda and Motilal Oswal did not respond to Mint's requests for a comment, Lal Sweets' Managing Director Prateek Athwani declined to comment on the developments.