IFC to provide $35 mn in debt funding to DCM Shriram
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International Finance Corporation plans to offer $35 million (Rs 245 crore) to DCM Shriram Ltd to help the agribusiness company expand a sugar factory and install a power plant.

IFC will provide the loan by way of an external commercial borrowing, the World Bank's private-sector investment arm said in a disclosure.

DCM Shriram is expanding its sugar plant at Hariawan by 5,000 tonnes of cane per day and a distillery unit at Ajbapur in Uttar Pradesh. It is also setting up a 30 megawatt co-generation power plant using bagasse as fuel in Hariawan, IFC said. The total project cost is estimated at Rs 603.1 crore ($86.1 million), it added.

DCM Shriram is owned by brothers Ajay S Shriram, Vikram S Shriram and Ajit S Shriram, who control a stake of more than 60% in the company. It has two main business lines. One is agribusiness, which includes fertiliser, seeds, sugar and trading of agricultural inputs, and the second is chloro vinyl, which includes caustic soda, chlorine, carbide and polyvinyl chloride.

It also has other smaller businesses such as cement, value-added PVC products maker Fenesta Building Solutions and a joint venture with Axiall Inc for PVC compounding.

The company’s sugar factories are located at Ajbapur, Rupapur, Hariawan and Loni in Uttar Pradesh, with a combined installed cane crushing capacity of 38,000 tonnes daily, and a power-generating capacity of 149 MW. It recently added a distillery with a capacity of 150 kilolitres daily.

IFC's debt investments

IFC has made several debt investments in the country in the recent past. Last month, it said it planned to make a debt investment of up to Rs 106 crore ($15 million) in Hyderabad-based Dodla Dairy Ltd. Also last month, it proposed to make a debt investment of $150 million (Rs 1,068 crore) in non-banking finance firm Bajaj Finance Ltd.

IFC’s other recent debt investments include putting $50 million (Rs 350 crore) into Ujjivan Small Finance Bank in November 2018.

Besides debt investments, the World Bank arm makes direct private equity-style bets in India across sectors. It is also an investor in private equity and venture capital firms focussed on India.

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