IDFC Private Equity (PE) Fund will invest Rs 150 crore in Jaipur-based Staragri Warehousing and Collateral Management, which is engaged in providing post-harvest services.
"The fund will be utilised for expanding warehouse network and also for creating a pan-India footprint of the allied post-harvest management services," IDFC PE Partner Girish Nadkarni said.
This is the first investment by IDFC PE in the agri services sector, which will provide opportunity for the fund -- IDFC PE Fund III -- to participate in the rural economy.
"The agri services sector has huge potential in the country. Currently, there is a storage deficit of 50 million tonne due to which there is a lot of wastage of foodgrains.
"Today, collateral finance is the most secured form of financing which is expected to grow to Rs 1 lakh crore in another three-four years from the present Rs 15,000 crore," Nadkarni said, adding that the fund is expecting payback in four-five years.
Staragri, founded in 2006, is engaged in agri commodity warehousing services, including storage, lab testing, collateral management services and procurement services.
The company is planning to put up 30 lakh tonnes of warehouse space across 10 states in four years, of which about 5% will be cold storage, Staragri Managing Director and Chairman Suresh Goyal said.
At present, Staragri is present in 190 locations in 10 states with 750 agri commodity warehouses under its control and has a cumulative capacity of around 10 lakh tonne.
"Currently, all 170 warehouses [of which about 18% is for cold storage space] are under lease. However, going forward we are planning a mix of lease and own. We are planning to have about 40% company-owned warehouses," Goyal said, adding the company targets to reach another 25 lakh farmers directly for post-harvest management services.
The company has direct business relationship with 50,000 farmers, agri-processors and enterprises, banks, exporters and commodity exchanges.
Staragri will also introduce new loan products, expand testing laboratories and spread retailing and insurance distribution, he said.
