International Finance Corporation (IFC) has proposed a debt investment of up to $22.5 million (Rs 160 crore) in pulse processor and trader ETC Agro Processing (India) Pvt. Ltd.
IFC will provide the capital via non-convertible debentures, the World Bank’s private-sector investment arm said in a disclosure.
ETC Agro, part of agricultural conglomerate ETC Group, will use the funding to expand its operations in India. The company requires long-term working capital of $77 million for the planned expansion, IFC said.
IFC, which makes direct investments and acts as a limited partner to private equity and venture capital funds, said that ETC Agro’s planned expansion will focus on higher yields and less volatile processing.
The expansion project involves the agricultural firm scaling up operations across its own processing capacities in Kolkata, as well as Vasad in Gujarat and Khopoli in Maharashtra. ETC Agro will also use the capital to ramp up operations in third-party processing units across India, IFC said.
This expansion will have a positive impact on low-income consumers in states such as Assam, Bihar, Uttar Pradesh and Jharkhand. It will also result in rising incomes for farmers because of the increase in pulse purchases.
This is not the first time the Washington-headquartered IFC is investing in ETC Agro. In February 2017, it said it was planning to make a debt investment of $30 million (around Rs 200 crore) in the company.
ETC Group is a vertically integrated agricultural supply chain firm involved in origination, procurement, warehousing, transport, trading, farm processing and consumer products. The group and its subsidiaries are active in 35 countries across Africa, Asia and America.
It is controlled by Mahesh Patel, Ketan Patel and Birju Patel, who are based in Tanzania, London and South Africa. Investors that own a stake in the ETC Group include Mitsui & Co. and Pembani Remgro Infrastructure Fund.
IFC has been on a dealmaking spree in the country of late. In July last year, it took part in business-to-business marketplace Bizongo’s Series C funding round. In the same month, the firm said it would provide $150 million (around Rs 1,028 crore) in the form of a five-year senior loan to private-sector lender RBL Bank.
In May, it anchored a $222 million debt funding round in Cholamandalam Investment and Finance Company Ltd. In April, IFC said it planned to provide $125 million to L&T Finance Ltd to help the non-bank lender expand its farm equipment financing portfolio.
