August 2, 2016

Mauritius-based private equity firm, Mandala Capital, has made its first close of $140 million on its second fund created to invest exclusively in India-based agricultural and food companies.

The firm currently has a fundraising target of $250 million for its second India-based ag-focused fund.

“We are targeting $250 million of final close by December 2016,” Uday Garg, founder of Mandala Capital expressed in an email to the Economic Times.

It will be interesting to see if this goal is indeed achieved as India-focused funds have recently found it more challenging to raise funds compared to 2014/2015 according to Deal Street Asia.

The Economic Times points out that low return on investment due to a lack of clear exits, currency devaluation due to shifts in foreign exchange, and general economic challenges specific to India have made investors wary and highly selective, choosing to opt for more well-defined funds targeting niche or sector categories rather than India as a whole.

Garg disagrees with this assessment, however, stating, “The fund raising environment is better than in the past 5 or 6 years.”

Fund I

Mandala Capital has invested approximately US$180 million so far from its first fund in businesses engaged in seed technology, cold storage and transportation, bio-refining from renewable resources, agribusiness financing, and food and beverage manufacturing.

Most recently the firm completed the acquisition of a 51% majority stake in food testing lab start-up EFRAC in exchange for $10 million, with a further commitment to invest another $10 million after three years on the condition that the startup reach 100% capacity utilization with a minimum annual turnover of $40 million.

Additionally, in March of this year, the firm invested Rs 402.2 cr (US$60.45 million) in Jain Farm Fresh Foods Ltd. – the newly formed food processing arm of Jain Irrigation Systems in exchange for a stake ranging between 14.27% and 17.35% based on revenue structure.

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Lynda Kiernan