Sure, it’s not sexy, but agricultural warehousing and infrastructure in India is poised for significant growth. India’s warehousing gap was recently estimated in a report issued February 18 by a committee established by the Warehousing Development and Regulatory Authority to be 35 million tons. A vital link to the success of businesses both up and down the supply chain, warehousing companies offer more than storage, providing other services including procurement, maintenance, collateral management, and financing. And as futures and options trades increase as commodity exchanges mature, there will be an even greater need for these businesses. To fund this growth, Indian warehousing companies are reaching out to private equity firms to finance growth objectives and expansion of services.
Everstone Capital-based Sohan Lal Commodity Management Pvt Ltd which operates 705 locations, National Collateral Management Services Ltd (NCMSL), and Origo Commodities India Pvt Ltd are all seeking investments from private equity firms, with Sohan Lal and NCMSL already having commitments.
Sohal Lal is looking to secure Rs100 cr (US$16 million), and NCMSL, which is backed by Rabo Equity Advisors’ Agri Business Fund, International Finance Corp., and Indian Farmers Fertilizer Cooperative, is looking to raise Rs200 cr (US$32 million) from private equity groups. In the case of NCMSL, which operates 50 locations, the company will use the funds to launch its non-banking financial services (NBFS) company, and expand into weather forecasting, to advise the industry on monsoon patterns, and possible crop failures.
Origo Commodities, which operates 500 locations, has approval from its board to raise Rs 50 cr (US$8 million) of a total target of $10 million in its maiden fundraising round, having previously used its own funds for operations and expansion costs.
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