IFCI Venture Capital Ltd, a venture capital arm of IFCI, has invested Rs 25 crore to pick an undisclosed minority stake in Century Metal Recycling Pvt Ltd, a company which sells recycled aluminum and zinc alloys to leading automotive parts manufacturers.
Founded by first-generation entrepreneur GS Agarwal, along with his son Mohan Agarwal, the recycling company began as a small plant in 1986, with 500 tonnes of annual capacity, and has now grown into one of the largest recycling plants in India, with an estimated 90,000 tonnes annual capacity.
The monies raised will be used to set up more plants across India. Emerging India Value Advisors Pvt Ltd was the exclusive advisor to the sellers.
There is an increasing trend towards use of recycled aluminum in its primary user industry, i.e., the auto sector, due to its lightweight, high strength-to-weight ratio and environmental advantages, Mohan Lal Agarwal, MD, CMR, told VCCircle. The company has names like Yamaha, Honda, RICO and Mitsubishi in its clientele.
For IFCI Venture Capital Fund, it is turning out to be a busy year. In April, it had invested $2.08 million in Lokesh Machines Ltd, a Hyderabad-based small-sized machine tools maker. In March, Shakti Pumps India Ltd, another small-sized public company, said it was raising fresh funds through issue of shares and optionally convertible debentures from IFCI Venture Capital Funds.
In January this year, IFCI Venture Capital stated that it was picking up 10 per cent stake in Ganesh Polytex, a small-sized public listed firm which recycles consumer PET bottle waste into polyester staple fibre, for about Rs 13.5 crore ($2.9 million).