PE, VC firms increase investment in Agri business

Have invested $126 mn across nine Indian companies in sector in first six months of 2013

The Private Equity (PE) and Venture Capital (VC) firms had shown high interest on the Agri-business companies, investing $126 million across nine Indian companies in the sector in the first six months of 2013. This is around 75% more than the $72 million invested across six companies during the same period last year, says data from research service firm Venture Intelligence.

The largest PE investment witnessed in the sector during the first half of 2013 was the Multiples Private Equity investing Rs 250 crore ($43.24 million) in Bangalore-based Milltec Group, which develops technology and machinery for rice milling, roller flour milling, maize (corn) milling and Agro-processing plants.

India Value Fund, a buyout focused firm, has committed $40 million to pick up a majority stake in Kochi-based spices firm VKL Seasoning, a spin out from the Vallabhdas Kanji Group, which provides seasonings and flavours to customers, mainly the Quick Service Restaurants (QSRs) in India, the Middle East and Africa.

In February, this year, Qatar-based Hassad Food had acquired a 69% stake in PE-backed rice exporter Bush Foods Overseas for $135 million, fetching Standard Chartered Private Equity a 2.5 times return on its investment.  Besides, the publicly listed rice exporter Kohinoor Foods agreed to sell a 20% stake for almost Rs 113 crore ($18.8 million) to Al Dahra Holdings, an Abu Dhabi-based agriculture focused investment firm.

"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," said Arun Natarajan, CEO of Venture Intelligence, in an announcement.

Not only the PE firms, but also the VC firms had their increased interest on the Agri-business, making it to compete with Healthcare for the position of second favourite industry among the VC, after Information Technology, in terms of number of investments during the second quarter of the calendar year 2013, said Venture Intelligence.  The firms focusing on the sector had stepped up their investment in Agri-businesses.

Omnivore Partners, which focuses on Agri-business, had announced two new investments during in pork products firm Arohan Foods and fly trap maker Barrix Agro Sciences. Similarly, Khyati Foods, focused on Soybeans, Oilseeds, Spices, attracted investment from Agri-business focused fund SEAF and Sarona Asset Management and Lawrencedale Agroprocessing, focused on Agri Logistics, from Aspada Investments, during the second part of the first six months of 2013, added the research firm.

 The Private Equity (PE) and Venture Capital (VC) firms had shown high interest on the Agri-business companies, investing $126 million across nine Indian companies in the sector in the first six months of 2013. This is around 75% more than the $72 million invested across six companies during the same period last year, says data from research service firm Venture Intelligence.

The largest PE investment witnessed in the sector during the first half of 2013 was the Multiples Private Equity investing Rs 250 crore ($43.24 million) in Bangalore-based Milltec Group, which develops technology and machinery for rice milling, roller flour milling, maize (corn) milling and Agro-processing plants.

India Value Fund, a buyout focused firm, has committed $40 million to pick up a majority stake in Kochi-based spices firm VKL Seasoning, a spin out from the Vallabhdas Kanji Group, which provides seasonings and flavours to customers, mainly the Quick Service Restaurants (QSRs) in India, the Middle East and Africa.

In February, this year, Qatar-based Hassad Food had acquired a 69% stake in PE-backed rice exporter Bush Foods Overseas for $135 million, fetching Standard Chartered Private Equity a 2.5 times return on its investment.  Besides, the publicly listed rice exporter Kohinoor Foods agreed to sell a 20% stake for almost Rs 113 crore ($18.8 million) to Al Dahra Holdings, an Abu Dhabi-based agriculture focused investment firm.

"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," said Arun Natarajan, CEO of Venture Intelligence, in an announcement.

Not only the PE firms, but also the VC firms had their increased interest on the Agri-business, making it to compete with Healthcare for the position of second favourite industry among the VC, after Information Technology, in terms of number of investments during the second quarter of the calendar year 2013, said Venture Intelligence.  The firms focusing on the sector had stepped up their investment in Agri-businesses.

Omnivore Partners, which focuses on Agri-business, had announced two new investments during in pork products firm Arohan Foods and fly trap maker Barrix Agro Sciences. Similarly, Khyati Foods, focused on Soybeans, Oilseeds, Spices, attracted investment from Agri-business focused fund SEAF and Sarona Asset Management and Lawrencedale Agroprocessing, focused on Agri Logistics, from Aspada Investments, during the second part of the first six months of 2013, added the research firm.