Rabo to double agri investments

Rabo Equity Advisors, a subsidiary of Rabobank, is likely to exit by fiscal 2017 investments it has so far made in the Indian agri-business companies.

The company had earmarked $120 million for investing in the Indian agri-business entities through its India Agri Business Fund I. It is also lining up a second fund with an estimated size of $250 million.

“We have exhausted about 65% of the fund by investing in eight companies in the sector. We will invest in another three companies in the next few months. The fresh investment includes infusion of funds into a food-related company catering to the consumers. This would bring the deployment of the fund to an end,” Rajesh Srivastava, chairman and managing director of Rabo Equity Advisors, said.

The fund has invested in Geepee Agri Pvt Ltd, Sri Biotech Laboratories, LT Foods and Daawat, NCMSL  and Super Agri Seeds.

While Rabo has already exited Geepee through a strategic sale, the other investments, too, are being evaluated. “This fiscal we will start exiting the other investments. Our oldest investment is just three years old and we will look for options to exit,” he said.

While the company earlier tried to exit one of the entities through an IPO, unfavourable market conditions had forced it to put the plan on hold. He said Rabo holds over 26% stake in all the companies where its funds have been invested.

Meanwhile, Rabo Equity is gearing up to raise money for its India Agri Business Fund II. The fund is estimated to be of about $250 million.

“We are keen on having the fund invested in Indian entities for a longer duration and the ticket size, too, is likely to increase. We would invest up to $15 million using the second round of funding, though the stake we expect would continue to be between 15% and 30%. We would stay with the investment for about five years in the new round of funding,” he said.

Rabo recently invested Rs50 crore in Hyderabad-based Super Agri Seeds, which produces seeds for cotton, corn, rice and vegetable sectors.

Super Agri which has a topline of about Rs75 crore expects it to touch Rs350 crore by fiscal 2015.

With funds provided by Rabo, the company is planning to set up a biotechnology lab for further research into crop varieties. Super Agri is also working on forming joint ventures with two European majors for seed production know-how.