The sector has seen investments rise 75 per cent in first six months of 2013. Middle-Eastern investors, in addition to India PE funds, are keen on taking a piece of the sector
BY VENTURE INTELLIGENCE
Private Equity and Venture Capital firms invested $126 million across nine Indian Agri-Business companies during the first six months of 2013, 75% more than the $72 million (invested across six companies) during the same period last year.
The largest PE investment in the industry in 2013 was Multiples Private Equity’s Rs.250 crore ($43.24 million) investment in Bangalore-based Milltec Group which develops technology and machinery for rice milling, roller flour milling, maize (corn) milling and agro processing plants. Another buyout-focused PE firm, India Value Fund, has committed $40 million to pick up a majority stake in Kochi-based spices firm VKL Seasoning. VKL, a spin out from the Vallabhdas Kanji Group, provides seasonings and flavors to customers – typically Quick Service Restaurants (QSR) – in India, the Middle East and Africa.
“In February, Qatar-based Hassad Food had acquired a 69% stake in PE-backed rice exporter Bush Foods Overseas for $135 million, fetching StanChart PE a 2.5 times return on its investment. And just last week, the publicly listed rice exporter Kohinoor Foods agreed to sell a 20% stake for almost Rs.113 crores ($18.8 million) to Al Dahra Holdings, an Abu Dhabi-based agriculture focused investment firm,” noted Arun Natarajan, CEO of Venture Intelligence. “The rising appetite for such companies among overseas investors and also the higher prices being enjoyed by agri commodities in recent years could continue to sustain Private Equity interest in the industry,” he added.
Apart from Private Equity buyouts, the latest quarter (ending June 2013) also witnessed Venture Capital funds and specialist agri-business focused funds stepping up their investment activity in Agri-Businesses. So much so that Agri-Business was tied with Healthcare as the second favorite industry among VCs (after Information Technology) based on the number of investments during Q2’13.
The Agri-Business focused Omnivore Partners announced two new investments in the latest quarter: in pork products firm Arohan Foods and fly trap maker Barrix Agro Sciences. Two other companies in the industry that attracted VC investors during Q2’13 included Khyati Foods (focused on Soybeans, Oilseeds, Spices) from SEAF and Sarona Asset Management and Lawrencedale Agroprocessing (focused on Agri Logistics) from Aspada Investments.
THE TOP DEALS IN NUMBERS
|Milltec Group||Multiples Private Equity invested Rs.250 crore in the Bangalore-based agri-technology and machinery company|
|VKL Seasoning||India Value Fund has committed a $40 million investment in the Kochi-based spices company|
|Bush Foods Overseas||Qatar-based Hassad Food had acquired a 69 per cent stake in the rice exports company|
|Kohinoor Foods||Sold a 20 per cent stake for almost Rs.113 crores to Al Dahra Holdings, an Abu Dhabi-based agriculture focused investment firm|
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