Multiple global private equity funds including Blackstone, Carlyle, Bain Capital, JP Morgan, TPG, and Samara Capital have all reportedly bid to acquire a significant minority stake in Indian agri-logistics company, National Collateral Management Services Ltd (NCML).
These bids have placed a value of approximately Rs 450-650cr (US$70.7 – $102 million) on NCML, but the company is targeting a valuation closer to Rs 750cr (US$118 million).
Founded in 2004, and owned by Rabo Equity Advisors, IFC, and Indian Farmers Fertilizer Cooperative Ltd (IFFCO), NCML controls one of the largest warehouse networks in India with 800 warehouses located across 12 states, managing 42 agricultural commodities.
In 2011 NCML raised $18.5 million, with Rabo Banks’ private equity arm, Rabo Equity Advisors investing $7.5 million, with the balance being invested by IFC and IFFCO. All three have since increased their stakes through additional investments with Rabo now holding approximately 25% of the company.
A report by Shreehari Lath, chief financial officer of Star Agri Warehousing & Collateral Management Ltd states, “Poor front end infrastructure, such as storage facilities, improper warehousing facilities, redundant food processing technology and the farmers’ inaccessibility to value-added services, results in wastage of 40 percent of the fruits and vegetables.” It is dynamics such as these that have created high investor demand for agri-logistic and warehousing firms in India.
Other investors in NCML in addition to Rabo Equity Advisors, IFC, and IFFCO include, Karur Vysya Bank, The Haryana State Cooperative Supply and Marketing Federation Ltd, NCDEX, Punjab National Bank, Corporation Bank, Bank of India, Canara Bank, HDFC Bank, ACE Geneva, Indian Bank, and YES Bank.
To receive relevant news stories with summaries provided by GAI News, subscribe to daily or weekly service.