Floriculture firm Neha International Ltd is raising $20 million (Rs 92 crore) through issuing Global Depositary Receipts to be listed on the Luxembourg Stock Exchange (LuxSE). The proposed GDRs shall be open for subscription to prospective subscribers from Friday.
Although raising financial resources through overseas issues was a usual feature among Indian firms till about five years ago, new fund raising tools such as qualified institutional placement besides development of a vibrant private equity growth capital had overshadowed such international listings.
While few firms have yet gone ahead with overseas listing including MakeMyTrip (in the US), GDRs that was the favourite of Indian companies (as it had fewer regulatory requirements compared to an ADR) became less important. Many companies still raised resources through London’s AIM market but LuxSE in particular became less popular for India Inc.
Hyderabad-based Neha International that is promoted by G Vinod Reddy had recently struck a deal to acquire 49.99% stake it didn’t own in Oromia Wonders PLC, a floriculture unit located in Ethiopia, for an undisclosed amount. With this acquisition, Neha International through its wholly owned arm Globeagro Holdings (acquired in February 2008 that made it one of the largest exporter of roses from Ethiopia to Japan) will own 99.99% in Oromia Wonders PLC.
The company that started business in mid-90s, entered Ethiopia around five years ago. It has sold off farm in Pune and shifted key operations to the African nation where it has two sets of land for floriculture as well as foodgrains.
It has expanded beyond being a supplier of flowers to Europe besides Middle Eastern markets in Saudi Arabia, Qatar and UAE. It is now aiming to generate value with cultivation of rice and pulses besides wheat and oil seeds.
It started operations in a phased manner on 4,000 hectares on lease in Ethiopia and in June this year disclosed it has acquired 10,000 acres in Ethiopia through its wholly owned subsidiary as part of diversification into agriculture.
It shares the podium with Karuturi Global in tapping the growing flowers and other agri commodities business in East African nation of Ethiopia. Companies like Neha International and Karuturi are banking on conducive climate for agriculture in Ethiopia that also offers incentives for investors besides providing a base to target markets in Middle East and Europe.