CDC to invest $10 m in Rabo's agri-fund

CDC Group Plc, the UK government-backed private emerging markets fund, is all set to partner with agri-business specialist Rabo Equity Advisors for investment in the Indian food and agri-segment.

It is planning to invest around $10 million in Rabo's India Agri Business Fund, taking the fund's kitty to about $100 million, according to sources.
CDC would be the fifth limited partner to join the Rabo fund, which was launched in July 2008 and has IFC, FMO, DEG and Rabobank as lead investors.
An announcement for this is expected to be made soon.
Confirming the development to DNA Money, Rajesh Srivastava, chairman and managing director of Rabo Equity Advisors, said, "CDC has shown interest in the Indian food and agri sector. After evaluating the sector, they have initiated discussions with us. In most likelihood, CDC will be directing their investments through our agri-fund."

It is understood that both the partners are currently in the process of finishing the legal work.
Anubha Shrivastava, CDC's managing director, Asia, was not available for comment. However, during her recent visit to India for the Asian Venture Capital Journal private equity conference in Mumbai, Shrivastava had announced that CDC will soon close its first investment in an agri-fund.

Despite the slowdown, the Indian food and agri sector has seen interest from private equity firms in the last three months.
In 2008-end, ePlanet invested in insecticides maker Sree Ramcides, Morgan Stanley acquired a minority stake in castor seeds company Biotor Industries Ltd while the Blackstone group pick up a pie of NSL Seeds.
R
ecently, PE firm IFC made a placement in Jain Irrigation while Rabo Equity Advisor invested in Hyderabad-based agri-biotech firm Sri Biotech Laboratories India Ltd. According to Arun Natarajan, managing director & CEO of Venture Intelligence, PE investors are keen to diversify beyond the metro cities and agri-business companies provide a good way for this.
"The development of cold chain and other logistics infrastructure increases investor confidence in this sector. Given that many companies, such asJain Irrigation, KS Oils, Lakshmi Overseas and Karuturi Networks, are listed, it provides confidence regarding exit routes," Natarajan said.