TVS Shriram Growth Fund IA, a private equity fund managed by has invested Rs 50 crore($10 million) in Dunar Foods, which is in the business of procurement, processing and supply of basmati rice. It is co-investing with IFC, the private sector investment arm of World Bank, which is bringing in Rs 74 crore separately.
Dunar Foods owns production facilities in Karnal (Haryana), Amritsar (Punjab), Bhopal (Madhya Pradesh) & Rudrapur (Uttar Pradesh). Its processing capacity is 50MT per hour besides hired capacity which it plans to double in next three years.
Last May, IFC had it is going to invest $30 million through a mix of equity and debt in Karnal-headquartered Dunar Foods.
“TVS Capital has a great team in place and understands the rice business and we are certain to achieve greater growth in the future by this association. The investment by the two leading private equity funds demonstrates the robust business model of Dunar Foods Limited and its competitive edge in the basmati rice business,” said Surender Gupta, MD of Dunar Foods.
Before the institutional investment, promoter Surender Gupta (whose father started the company over three decades ago) with his wife, children and sister-in-law Kanta Gupta, owned 63 per cent and 28 per cent of Dunar, respectively. The remaining minority stake was held by the promoter’s mother and the company’s management.
IFC had earlier said it will hold a minority stake along with the unnamed private equity fund in Dunar Foods.
“We believe in the company’s growth potential, because of the global branded rice business and the opportunity to scale the Indian retail business. Dunar is the 10th investment form the Fund, which brings us close to the completion of investing, from Fund IA,” said Gopal Srinivasan, MD of TVS Capital.
The investment is being made through the PE firm’s first fund, a Rs 600 crore domestic rupee fund managed by Chennai-based TVS Capital. TVS Capital is raising another Rs 400-500 crore through a top up fund under a new scheme – Scheme 1B.
It has announced the first close of Scheme 1B with over 75 per cent of the target commitment received. Bulk of it was from ultra HNIs/family offices and it will continue to focus on consumer driven opportunities.
TVS Capital had also invested in several companies in consumer products space including celebrity chef Sanjeev Kapoor’s restaurant business Indian Cookery Pvt Ltd and Gurgaon-based Om Pizzas & Eats Pvt. Ltd which holds franchise rights in India for brands such as Papa John’s Pizza.