NCMSL ties up with Rabbo Equity, IFC to fund expansion

The National Collateral Management Services Ltd (NCMSL), which provides agri-commodity handling and risk management services, has tied up with two private equity players to partly fund its expansion, a top company official said.

International Finance Corporation (IFC), the private equity arm of World Bank and Rabbo Equity, the PE arm of Rabbo bank, will together invest Rs 70 crore in NCMSL, the company's MD and CEO Sanjay Kaul told PTI today.

"The exit policies and the stake holding of the PEs will be decided later," he said while refusing to divulge more details.

NCMSL is planning to raise a total of Rs 400 crore for its expansion with Rs 120 crores from equity.

A total of seven banks which hold stake in the company, will contribute the remaining Rs 50 crore equity, he said, adding, "Some strategic investors are also evinced interest and we consider that too."

Kaul further said that the company is in the process of tying up with banks for raising the debt part for the expansion.

"We have appointed SBIT Cap as our merchant banker for the deal. We plan to borrow through ECBs (External Commercial Borrowings) route and domestic borrowing to raise the debt part," he said.

The company has 402 warehouses in 95 locations across the country. Of this, 70 per cent of them are on lease-basis and remaining 30 per cent work on the franchise model.

It has plans to have its own ware houses in 45-50 locations within a couple of years.

Apart from owning these, the company will expand its operations to 10 more centres in this fiscal, including Bihar and will start cold storages in atleast six places, Kaul said.NCMSL has tie-ups with 18 banks in collateral management of commodities and handle assets worth Rs 2,000 crores for various banks.