Agri-logistics player Sohan Lal Commodity Management has raised INR100 crore in the latest round of funding for pan-India warehouse management expansion plans. Funding is to be streamed to its Non-Banking Financial Company (NBFC), Kissandhan Agri-Logistics Company. The latest funding round was led by US-based private equity investor Creation Investments while existing investor Everstone Capital also participated. Sohan Lal Commodity Management counts Nexus Venture Partners, Mayfield India and ICICI Bank’s Emerging India Fund among its current investors.
This was the fourth round of funding for the New Delhi based company which is led by Sandeep Sabharwal. It is believed to be preparing for its initial public offering (IPO). In its third round of funding, the company had collected INR129.3 crore from Emerging India Fund and Everstone Capital in November 2012. Even though the company has not filed its draft prospectus with the regulator, Securities and Exchange Board of India, two investment banks ICICI Securities Ltd and HDFC Securities have been hired to manage the issue.
As we reported earlier, the latest round of funding paves way for an eventual IPO. Meanwhile, involvement of ICICI Securities Ltd and HDFC Securities indicates the IPO may not be very far.
The funds are to be employed in its agri-financing wing, Kissandhan which aims a three-fold growth in loan disbursement in the current fiscal year. Kissandhan has achieved INR250 crore-disbursement sum since 15 months of its establishment. It is India’s only warehouse incorporated NBFC to offer warehouse finance entirely to the agriculture.
The company also plans to expand the warehouse network from 760 to 1,500 across India.
Warehousing Funding Trend
There has been a noticeable upward trend in warehouse funding from large international funds in 2015. Staragri Warehousing and Collateral Management Ltd secured INR250 crore funding from Singapore state investment firm Temasek Holdings in April. Meanwhile, Prem Watsa’s Fairfax India pumped INR800 crore in National Collateral Management Services Ltd along with acquiring 74% stake. Creation Investments has already invested in India with Eko Financial Services, Sonata Finance, Grameen Koota and Equitas Holdings since 2011.
At present, Sohan Lal Commodity boasts of a total capacity of 1.77 million tonnes. Along with commodity Financing and agri-financing, it provides procurement, collateral management and allied services. Sohan Lal Commodity obtained the Best Warehousing Company Award from CPAI (Commodity Participants’ Association Of India). The company has been handling more than 157 agri-commodities comprising bajra, cotton, wheat, maize, pulses, barley, spices, castor seeds etc. throughout India.