Origo does first securitised agr-commodity transaction in capital markets

This transaction creates an alternative asset class through Agri-commodities

Origo Commodities, India’s leading agritech supply chain and trade finance company has joined hands with financial services enabler Vivriti Capital to execute a new asset class of securitised commodities in the country. The asset class will be available to institutional investors, introducing agri commodities in capital markets.

Origo provides end-to-end agriculture supply-chain solutions such as procurement, storage and financing.

With its transaction, Origo has forayed into the domestic securitisation market for agricultural produce, creating access for investors to invest in agriculture through a regulated and listed instrument. The transaction is listed with SEBI and regulated by WDRA.

The first securitised transaction has already concluded through the purchase of maize in the Gulab Bagh area of Bihar, for the transaction worth Rs 7 crore and aiming at Rs 100 crores for the current fiscal year.

 

Speaking on the launch, Sunoor Kaul, Co-Founder of Origo Commodities. said, “It is a great opportunity for investors to consider this as an additional option to hedge risks that other asset classes pose during market volatility. PTCs not only allow investors access to the Indian agriculture growth story but also infuse much-needed capital in this sphere. Less than 5% of the agri market has access to institutional capital today and we hope that the creation of asset classes like this will allow better penetration of formal credit into the system. Higher liquidity, in turn, will allow for better management and infrastructure for warehousing and food distribution in the country. Better food grain management and seamless transactions will also turn around the economic prospects for farmers and other stakeholders.”

Adithya Murali, Vice President Structured Solutions – Enterprise Finance at Vivriti Capital said, “We are excited to launch this as a new asset class which can over time expand the securitization market in the country. This transaction, with the credit protection it provides to investors, can help establish agriculture commodities as a strong asset for debt capital markets and provide liquidity relief to several participants in the agriculture commodities ecosystem. The availability of structured finance instruments has always increased investor participation over time, and this should be no different for commodity backed issuances.”