National Collateral Management Services (NCMSL), one of the leading agriculture warehouse providers, plans to set up 45 warehouses across 12 States at an investment of Rs 300 crore.
NCMSL will raise Rs 101.75 crore as equity investment from the India Agri-Business Fund promoted by Rabobank Private Equity Fund (Rs 34.50 crore), World Bank Group company International Finance Corporate (Rs 27.50 crore), IFFCO (Rs 23.75 crore), Karur Vysya Bank (Rs 9.15 crore), Hafed (Rs 4.85 crore) and NCDEX (Rs 2 crore). Rabobank Private Equity Fund and IFC are the two new investors in NCMSL.
The existing eight equity investors such as PNB, Corporation Bank, Bank of India, Canara Bank, HDFC Bank, Indian Bank, Audit Control and Expertise Group of Geneva and Yes Bank, will face a dilution in their equity holding as they are not participating in the fresh equity infusion, said Mr Sanjay Kaul, Managing Director, NCMSL.
“We have already started acquiring the requisite land and expect to complete the project in two years. Our total warehousing capacity will go up by six lakh tonnes from 10 lakh tonnes currently,” he added. NCMSL will raise a debt of Rs 198.25 through a consortium of banks led by Yes Bank.
Mr G.N. Saxena, Director, IFFCO, said there is tremendous opportunity in the warehousing space as there is an estimated shortage of 21 million tonnes of storage capacity. With the fresh investment, IFFCO's holding in NCMSL will go up to 21 per cent from 13 per cent.
Warehousing capacity
Mr Rajesh Srivastava, Managing Director, Rabo Equity Advisors, said the country produces about 155 million tonnes of agriculture products, but has warehousing capacity of 70 million tonnes.
“Investment by corporates in the warehousing space is more crucial as one cannot expect the Government alone to bridge such a huge gap the demand and supply,” he added. This is the seventh investment of $120 million India Agri-Business Fund formed about two years back.
Ms Anita George, Director (Infrastructure), IFC, said even as India has 140 million hectares of arable land, a huge quantity of food is wasted annually on account of inadequate agriculture infrastructure including storage and transportation facilities.