New Delhi, March 14 -- At its best, Haldiram Snack Food Pvt. Ltd is a great example of a successful Indian family business. At its worst, it is a purveyor of products that have become an unhealthy addiction for India's middle class. Private equity feeds on such dichotomies. Which explains whyTemasek picked up a 10% stake in India's largest snack brand-almost two years after the Haldiram's promoters, the Aggarwal family, decided to dilute their holding in it.

Several other investors includingBain, Blackstone, and Abu Dhabi Investment Authority (ADIA) also eyed a bite of Haldiram. But most of those conversations floundered over valuation issues.

The Rs.8,500 crore (nearly $977 million) that Temasek is paying for a 10% stake in Haldiram va...