Rabo Equity Advisors Pvt. Ltd, a farm and food-focused private equity (PE) firm, has invested Rs50 crore in Super Agri Seeds Pvt. Ltd. In a separate transaction, VenturEast Proactive Fund and Zephyr Peacock India agreed to invest Rs60 crore in e2E Rail, a services provider to railroad operators.
While Hyderabad-based Super Agri Seeds is the eighth investment by Rabo Equity Advisors in India, it is the PE firm’s first investment in a seeds company, having acquired a significant minority stake.
“It’s a well spread-out, diversified company and is not too dependent on cotton, and has a robust pipeline,” said Rajesh Srivastava, chairman and managing director (MD) of Rabo Equity Advisors.
Super Agri Seeds sells about 140 hybrid seeds to farmers and is in the process of forming joint ventures with European and Asian companies for research and development (R&D).
“The investment will be utilized to scale up the R&D centres in Hyderabad and Bangalore and also to create a state-of-the-art cotton and vegetable seed processing plant in Hyderabad, besides strengthening the distribution and marketing infrastructure,” said Ravi Srinivas, managing director of Super Agri Seeds, which had a revenue of about Rs75 crore this year and expects to increase sales to Rs250 crore by 2014.
“We did not have cotton (seeds) till last year. Cotton will help us grow tremendously,” Srinivas said.
Separately, e2E Rail received funding commitments of Rs60 crore from VenturEast Proactive Fund and Zephyr Peacock, to be paid in two tranches of Rs30 crore each.
“The global railway market represents a $600 billion (Rs30.72 trillion today) opportunity over the decade,” said Ganapa Sreenivasa Rao, managing director of Bangalore-based e2E Rail, which focuses on signalling, track and electrification.
“The central theme (of the Indian railway budget) was the ability to raise funds for the ‘safety and the efficiency’ of the Indian Railways by investing in ‘signalling and electrification’,” said Sarath Naru, managing partner of VenturEast.
“We plan to assist the company in its growth plans by providing it access to our global network of relationships and guidance in its long-term strategy and organization development,” said Mukul Gulati, MD of Zephyr Peacock India. e2E Rail had undertaken work for organizations, including Indian Railways, London Metro and the Delhi Airport Metro Express.
Siddharth Bafna, a partner and head of corporate finance and transaction services practice at Lodha and Co., believes the investments make sense.
“While the Indian Railways is a sector of huge growth and needs to go through significant modernization, farmers are realizing there is immense potential to increase productivity by using good quality seeds and good farming practices,” said Bafna.
Source: Livemint