IFC likely to invest $20 mn in organic food exporter Suminter

International Finance Corporation, the private-sector investment arm of the World Bank, is planning to invest up to $20 million (Rs 128 crore) in organic food exporter Suminter India Organics Pvt. Ltd for an equity stake, it said in a disclosure.

Suminter will use the proceeds for its working capital needs in the states of Madhya Pradesh, Rajasthan, Odisha, Maharashtra and Karnataka. It will also use the funds for expansion of its existing processing facilities in Madhya Pradesh.

The total project cost is estimated at $25 million. The balance $5 million will be funded through a mix of existing cash, internal accruals and additional equity, and debt from other financial institutions.

The investment proposal will be placed before IFC’s board on 16 October.

IFC has both direct and indirect exposure to Indian companies. It often acts as a limited partner to local private equity and venture capital funds.

Founded in 2004, Suminter is engaged in sourcing, processing and export of certified organic produce. Its founder Sameer Mehra, along with his family, holds approximately 45% stake in the company. The balance 55% is held by venture capital firm Nexus Venture Partners and alternative asset management firm Capricorn Investment Group through their investment vehicles, the disclosure says.

In June, VCCircle exclusively reported that Suminter had hired an investment banker to raise fresh funding of $50-100 million.

In December 2007, the company had raised $3 million in its first external funding from Nexus Venture Partners. Two years later, it raised another $5.98 million led by Nexus. Capricorn Investment Group and Skoll Foundation also participated in the second round.

In January 2015, Nexus and Capricorn pumped another $5.43 million into Suminter at a valuation of $100 million, according to VCCEdge, the data research arm of News Corp VCCircle.

So far, Nexus has invested $5.98 million in the company while Capricorn and Skoll Foundation have jointly invested $8.5 million.

Suminter reported revenues of Rs 339 crore for FY15-16, up 34% from Rs 253 crore in the previous year. Net profit more than tripled to Rs 14.48 crore from Rs 4.3 crore.

IFC has proposed a bunch of investments in the agribusiness space. In June, it proposed to invest in the food-grain milling plants of agri-commodity trading company Agrocorp International Pte Ltd.

In February, it proposed to make a debt investment of $30 million in ETC Agro Processing (India) Pvt. Ltd.

In 2016, IFC had planned to invest $175 million in Singapore-based commodities merchant Olam International Ltd to finance its projects in India and Nigeria.

Its other recent proposals include debt investments in solar power projects of ACME Solar Holdings Ltd and private equity firm Actis-owned Solenergi.

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