Imagine a farmer working on a farm for a fixed salary of ₹15,000 a month with monthly incentives of  ₹3,000-4,000 by working on farm owned by high networth individuals (HNIs) and others by growing crops sought by the firm.

This is how a tech-based online start-up platform Growpital has been operating over the last couple of years. In turn, the Gurugram-based company offers retail investors an alternative asset class outside mainstream assets. 

‘Geographically diversified’

“Retail investors get to own a collection of agriculture portfolios where they get tax-free fixed returns. On the parallel front, we take farms on lease and give job opportunities to farmers who are the highest skilled people who can work for us,” says Rituraj Sharma, Founder of Growpital. 

The start-up is currently working on 2,000 acres (810 hectares) taken on lease and crop diversification is being done on these lands across “geographically diversified” farms with a good clientele. 

Also read: Investment in agri tech startups jumps 2-fold to $4.6 bn in FY22

The company grows different types of grains, oilseeds, pulses, fruits and vegetables. Bananas, cumin (jeera), moong (green gram), soya beans, strawberries, mangoes, potatoes, watermelon, tomatoes, capsicum, and amla (gooseberries) are among the crops cultivated.

“We have alternate agriculture such as honey and mushroom,” he said.

Taking over tea estate

Growpital sells through open market and institutional channels. “Our priority is to give to institutional channels such as McCain, which buys potato from Barmer in Rajasthan, because of the predictability of the revenue,” Sharma said. 

Currently, Growpital has taken lands for farming in Rajasthan, Bihar, Chhattisgarh, Chandigarh, and Maharashtra. “We will be soon taking over a tea estate in Assam. We will be starting projects in Madhya Pradesh, Gujarat, Karnataka, and Kerala,” the company’s founder said. 

 Having worked with the solar industry early on, Sharma found those letting their lands for installing solar panels had a good amount of agricultural land with them. 

Gains shared

“Two years ago when we launched this company, we got associated with them. We started farming and then this layer of Growpital started,” he said. 

Growpital has 110 acres with it besides the 2,000 acres it has got on lease. “By the end of April, we will be working on approximately 6,000 acres,” the company’s founder said. 

In these two years, the start-up’s revenue has grown from a negative ₹1 lakh to ₹60 crore. “This has been possible because we are sustainable and profitable in nature,” he said. 

All those associated with the firm, including farmers, get a share of the company’s profits. Growpital takes the land on lease and invests working capital in the form of seeds, fertilizers, labour, land preparation and all activities concerning farming.

Diversified MF

“The working capital is infused by investors who sign a limited liability partnership (LLP). We follow the LLP route as the Income Tax rules say profits shared with all partners of an LLP or a partnership firm is free,” Sharma said. 

In a way, the investors get ownership of the farm project portfolio, which could be even viewed as a diversified mutual fund. Though agriculture is prone to risks from weather and market prices, the risks are not uniform across the country due to its varied agro-climatic conditions. 

 The efforts of Growpital are resulting in a tactical shift in the farming sector. “At least 55 per cent of the (farmer) population is doing freelance. They are skilled in their own world. They how to grow, what to grow,” the company’s founder said. 

Looking for higher returns

As the farmers’ families increase, they look for higher returns which are inhibited by limited land availability. “So, we ensure their financial security by paying a salary with a variable pay, which is a kind of minimum guarantee that can increase their income by 3-4 times,” Sharma said. 

Growers could get a higher variable pay if they grow horticultural crops and most Growpital investors come through its online platform, he said.

At least 1,000 investors have deployed ₹25 crore capital with Growpital with about 100 non-resident Indian investors. At least 600 farmers are working with the start-up with at least 200 of them being permanent. 

Farmers’ upskilling

Also, some farmers approached the company whenever it took lands on lease in a particular village.  “We also do some upskilling of farmers, say for example in mustard or watermelon, in aspects such as spraying. They find it useful and take pride in working for us,” Sharma said. 

Growpital has a central agronomy team which decides on the whole package of practice that its workers have to follow. The activities are supervised on a daily basis and the execution is seamless, he said.

The start-up focus is on stabilising margins from farms and it takes up proactive measures to curb the impact of weather-related problems. It also deploys modern methods of farming including drones. 

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