International Finance Corporation (IFC), the private investment arm of the World Bank, is likely to invest Rs 35 crore (around $7.5 million) in equity in National Collateral Management Services Ltd (NCMSL), a Mumbai-based provider of integrated supply chain solutions as well as risk management services to producers, traders and end users, VCCircle has learnt. IFC is also investing another Rs 60 crore (about $ 13 million) in NCMSL as debt.
The company is raising the funds to set up its own warehouses across the country for storing agri-commodities. The company has estimated the total cost of the project at Rs 420 crore (about $90 million).
Of the total project cost, NCMSL plans to raise Rs 140 crore (about $30 million) via equity and internal accruals, while the balance Rs 280 crore (about $60 million) will be raised through debt from IFC and other local banks. The project will be developed in two phases over a period of 3-4 years.
The warehouses will primarily be located in rural and semi-urban areas, and will be developed in states including Haryana, Rajasthan, Uttar Pradesh Madhya Pradesh, Andhra Pradesh, Karnataka, Kerala, Gujarat, Tamil Nadu and Maharashtra.
NCMSL services are offered to agricultural and non-agricultural commodities, and inventories. It primarily offers warehousing and storage, procurement and collateral management to banks providing agri-commodity financing. Sanjay Kaul, former director and CEO of NCDEX Institute of Commodity Markets and Research, is the managing director and CEO of the company.
It is jointly promoted by several leading banks, other co-operative bodies, and Audit Control and Expertise Group (ACE), a global collateral manager based in Geneva. The promoters include Punjab National Bank, Indian Farmers Fertilizer Cooperative Ltd (IFFCO) and National Commodity Exchange of India (NCDEX), Corporation Bank, Canara Bank, Bank of India, Karur Vysya Bank, HDFC Bank, Haryana State Cooperative Supply & Marketing Federation Ltd, ACE, Indian Bank, and Yes Bank.
NCMSL currently operates around 400 warehouses taken on short and medium term lease based model in over 80 locations across the country.