The India Agri-Business Fund (IABF), Rabobank’s private equity arm, and International Finance Corporation (IFC), along with four existing shareholders have roped in to invest Rs 101.75 crore in National Collateral Management Services (NCMSL), a warehousing arm of the National Commodity and Derivatives Exchange (NCDEX).
IABF and IFC have agreed to invest Rs 34.50 crore and Rs 27.50 crore, respectively in the company, which is planning to set up a 600,000-tonne state-of-the-art warehousing facility in 45 locations spread across 12 states.
Others, including Iffco, Karur Vysya Bank, Hafed and NCDEX have agreed to invest Rs 23.75 crore, Rs 9.15 crore, Rs 4.85 crore and Rs 2 crore, respectively. Iffco will then emerge as the largest shareholder in the company, with its equity to rise to 20.6 per cent from 14 per cent now.
NCMSL also plans to raise Rs 200 crore from a consortium of six banks led by YES Bank, for which negotiations are in an advanced stage. The company has already started land acquisition in various states to commence commercial operation in 24 months.
“We have one million tonnes of storage capacity spread in 700 warehouses across 16 states. All of them are on lease. With this investment, we will be able to build 3.5 million square feet of modern warehousing facility which will offer us higher profit margin,” said Sanjay Kaul, managing director of NCMSL.
With this infusion of equity, the existing shareholders, including NCDEX, Canara Bank and Bank of India, will have to suffer equity dilution, Kaul said.