Rabo Equity India Agri Business Fund II (IABF II) is reportedly currently in talks to raise $30 million from the Asian Development Bank (ADB) and is looking to raise an additional $80 million from European and Asian investors. The fund is targeting a total corpus of $200 million by October of this year. It has already raised $90 million, and announced its first close at the end of March.
The Indian agribusiness space offers investors high potential for growth given the country’s climbing population, its rising wealth, and consumption rates. Although Indians spend a significant amount of money on food, spending on processed foods is expected to increase four-fold by 2020. Currently, processed foods account for only 12% of India’s food consumption, compared to 40% for China and 80% for Malaysia – and it is factors such as these that India Agri Business Fund is a direct play upon.
“It has been a fairly active sector when it comes to private equity (PE) investments as it holds huge opportunities and there are several avenues such as food processing, agri-logisitics, branded food products, agri-financing, etc., for PE funds to invest in.” Harish H.V., partner at Grant Thornton India LLP tells Mint.
IABF II plans to deploy the fund through 12 investment of between $15 million and $17 million each across agricultural subsectors including agricultural inputs, food processing, retail, cold chain storage, and distribution. Three deals are currently being evaluated with one scheduled to close within a month.
In addition, Rabo is focusing on exiting the investments made through its first India Agri Business Fund which raised $120 million in 2008-2009, deploying 10 investments concluding in March 2014. Rabo is looking to exit its entire portfolio by the end of 2016, and has begun the process of exiting the warehousing company, National Collateral Management Services Ltd., Prabhat Dairy Ltd., and foods business, Global Green Co.
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