Rabo Equity to raise $400 million for India play
, ET Bureau|
Updated: Oct 11, 2017, 08.52 AM IST
Rabo Equity Advisors, Asia's first private equity fund dedicated to food and agribusiness sector, plans to raise about $400 million from leading global institutional investors to make significant investments in India.
The fund, which had invested in rice distributor and fruits processing companies, plans to more than double its investments in the country in the wake of the government giving a push to the farm sector and widening crop insurance, which makes farming safer.
"We have started preparing for this new round of fundraising ($400 million)," Rajesh Srivastava, chairman of Rabo Equity Advisors told ET. "We expect many global investors to participate as we will conclude it in the next calendar year.
The food processing sector, which is likely to grow 12-15 per cent CAGR (now 8.50 per cent) in the next five years, will be a large focus of our new fund. You will not find such exponential growth in any other industry in India."
Another focus of the new fund will be agribusiness infrastructure. There is a big opportunity to invest in cold logistics, for instance, since 30-40 per cent fresh products go waste in the absence of cold logistics.
Similarly, modern warehousing capacity is needed for foodgrains, as 35-40 million tonnes of stock lies in the open space under tarpaulin, as per data from Rabo Equity Advisors. "This caters to opportunities for infrastructure buildup. India's need for funding in food processing sector will go up rapidly," Srivastava said.
In 2008, Rabo Equity Advisors had floated its first India-focused fund with a corpus of $120 million, with investors such as International Finance Corporation and DEG. Later, in 2014, it floated another fund of $150 million with investors including CDC Group, Asian Development Bank, Generali Insurance, French sovereign wealth fund Proparco and Denmark-based IFU. The Netherlands-headquartered Rabobank sponsored both funds with $30 million investment each.
It has deployed the entire corpus of first fund while the second fund is allocating its corpus.
Investors are likely to earn 2.5x investment returns on average for five-six year investment period.
The fund, which had invested in rice distributor and fruits processing companies, plans to more than double its investments in the country in the wake of the government giving a push to the farm sector and widening crop insurance, which makes farming safer.
"We have started preparing for this new round of fundraising ($400 million)," Rajesh Srivastava, chairman of Rabo Equity Advisors told ET. "We expect many global investors to participate as we will conclude it in the next calendar year.
The food processing sector, which is likely to grow 12-15 per cent CAGR (now 8.50 per cent) in the next five years, will be a large focus of our new fund. You will not find such exponential growth in any other industry in India."
Another focus of the new fund will be agribusiness infrastructure. There is a big opportunity to invest in cold logistics, for instance, since 30-40 per cent fresh products go waste in the absence of cold logistics.
Similarly, modern warehousing capacity is needed for foodgrains, as 35-40 million tonnes of stock lies in the open space under tarpaulin, as per data from Rabo Equity Advisors. "This caters to opportunities for infrastructure buildup. India's need for funding in food processing sector will go up rapidly," Srivastava said.
In 2008, Rabo Equity Advisors had floated its first India-focused fund with a corpus of $120 million, with investors such as International Finance Corporation and DEG. Later, in 2014, it floated another fund of $150 million with investors including CDC Group, Asian Development Bank, Generali Insurance, French sovereign wealth fund Proparco and Denmark-based IFU. The Netherlands-headquartered Rabobank sponsored both funds with $30 million investment each.
It has deployed the entire corpus of first fund while the second fund is allocating its corpus.
Investors are likely to earn 2.5x investment returns on average for five-six year investment period.
