June 2, 2016

Rabobank Equity Advisors’ India Agri Business Fund II has made its first deal, investing US$15 million in India’s Cremica Food Industries Ltd. for a minority stake in the business, reports VC Circle.

Cremica Foods’ product range includes mayonnaise, ketchups, sauces, salad dressings, jams, and its Opera line of chips. The company’s currently has a turnover of $US30 million but is targeting a turnover of US$150 million by 2020.

The India Agri Business Fund II is the second fund by Rabobank Equity Advisors. This new fund, with a total targeted corpus of $200 million, will focus on investments in agriculture, dairy, and warehousing. Having raised the first half of the targeted funds from anchor investors and sponsors, Rabo Equity Advisors will shift its focus to commercial investors such as insurance companies, pension funds, and funds of funds for the remainder. The fund plans to invest between $15 million and $17 million into each of 10 to 12 companies. Through its first fund – India Agri Business Fund I, Rabobank has invested approximately $120 million in 10 companies, and has moved on to begin exits from these investments.

In February 2015 the Hindu Business Line reported that Cremica Foods was looking to raise Rs 120 cr (US$18 million) to support the nationwide expansion of its distribution network. New funding is also expected to provide Cremica the option of offering an exit to its current investor, Motilal Oswal.

“We are looking to strengthen our retail distribution. Our road map is to grow our retail presence from about 20,000 outlets to 200,000 outlets in the next few years,” Akshay Bector, Chairman and Managing Director, Cremica Food Industries told Business Line.

The company currently has plants in Punjab and Delhi, and plans to invest US$22.5 million in the next two to three years to increase its production capacity including an investment in a new food park in Himachal Pradesh.

“There is a huge potential to penetrate the retail market and enhance our sales through hotels, cafes and restaurants,” Bector told Business Line, which reports that business from retail and servicing hotels, restaurants and cafés in India has been growing at nearly 30% in recent years.

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GAI News staff