FMO, the Netherlands’ development finance company, is planning to invest $45 million (Rs 322 crore) in Fairfax-backed agri-warehousing firm National Collateral Management Services Pvt. Ltd.
The proposed funding will be used to finance the construction of new steel silos for the storage and preservation of staple food products such as wheat and rice, FMO said in a statement.
The said capital will also improve access to finance for the farmer community, thereby promoting agriculture development as a means of alleviating poverty, the statement added.
Fairfax India Holdings Corporation, which had acquired a 73.56 per cent stake in National Collateral for Rs 800 crore ($125 million then) in August 2015,
shelled out about Rs 160 crore ($24 million then) to increase its stake to a little over 88% in November that year.
Incorporated in 2004, National Collateral operates in the mid-stream agriculture value chain by offering solutions in grain procurement, testing, storage and collateral management. It operates a pan-India network of warehouses with more than 1.7 million tonne storage capacity.
The company’s consolidated net sales during 2017-18 stood at Rs 1,220 crore as against Rs 777 crore a year before. Its net profit increased to Rs 35 crore from Rs 30 crore during the period under review, according to VCCEdge, the financial data platform of Mosaic Digital.
FMO
The Dutch development bank finances projects through equity and debt instruments in sectors such as agri-business, food and water, energy and financial institutions in underserved regions. It has been an active investor in India.