International Finance Corporation (IFC) plans to offer up to $54 million (around Rs 397 crore) in debt to poultry company Suguna Group.
Coimbatore-based Suguna will use the funds for its various projects in India, Bangladesh and Kenya, the World Bank's private-sector investment arm said in a disclosure. The overall cost of Suguna's projects is $67.2 million, it added.
IFC had invested in Suguna in 2006 and later sold its stake back to its promoters in 2014.
For Suguna's India project, IFC plans to provide a loan of $15 million and another $25 million in the form of non-convertible debentures (NCDs). Suguna's India project involves further expansion of its operations in northern and eastern states of the country primarily in Uttar Pradesh, Odisha, and West Bengal.
It also plans to extend a loan of $10 million and $4 million each for Suguna's projects in Bangladesh and Kenya, respectively. Suguna is investing to construct feed mills, breeders and hatcheries in both these countries.
Established in 1984, Suguna's promoters are Bangarusamy Soundararajan, the chairman, his younger brother Ganapathypalayam Bangarusamy Sundararajan, the managing director, and their family members.
The company, which is consolidated under the holding company Suguna Holdings Pvt. Ltd, is a poultry operator covering broiler and layer farming, hatcheries, feed mills, and processing plants across 20 Indian states and one union territory. It also has operations in Sri Lanka besides Bangladesh and Kenya in the overseas market.
IFC’s recent India bets
The investment in Suguna Group is the latest example of the Washington-headquartered IFC’s commitment to India, which is its single-largest portfolio market. Apart from its direct investments that involve both equity and debt funding, the institution also actively invests PE and VC funds.
Last month, IFC said it will invest nearly $30 mn in private equity-backed Future Lifestyle Fashions.
In October last year, it said that it was planning to make an equity investment of up to $20 million (around Rs 141.82 crore) in the overseas unit of agricultural producer Maharashtra Hybrid Seed Company Ltd. (Mahyco India).
In July it took part in business-to-business marketplace Bizongo’s Series C funding round, which saw the startup valued at nearly $100 million. In the same month, the firm said it would provide $150 million in the form of a five-year senior loan to private-sector lender RBL Bank.