India's largest rose exporter Karuturi Global Ltd is raising Rs 75 crore ($16.1 miilion) from a fund managed by IL&FS Investment Managers Ltd (IIML), India's largest private equity firm. Karuturi is allotting around 36.39 million shares for Rs 20.61 each, a discount to Tuesday's closing price of Rs 21.25 per share. IIML, which is investing from the $225 million Tara India Fund III, could be picking a 6.53% stake on a post-diluted basis.
VCCircle reported last month that Karuturi Global was in talks with private equity funds including IIML for its expansion plans. The company is looking to raise up to $150 million through a mix of equity and debt funding.
IL&FS PE is investing through three entities - Tara India Holdings A Ltd, Tara India Fund III Trust and Tara India Fund III Domestic Trust. Karuturi is expected to call for an EGM for shareholders approval.
The share price of Karuturi weant up by more than 10% today, reaching Rs 23.45. Hedge fund Monsoon Capital picked up 3.8% stake in Karuturi last month by converting warrants last month.
The Bangalore-based company has also been eyeing funding for Karuturi Overseas Ltd, the holding company for Africa operations. Sai Ramakrishna Karuturi, managing director of Karuturi Global told PTI last month that the company plans to invest $100 million for setting up a 7,000-tonnes per day capacity sugar-cane crushing plant in Ethiopia.
Karuturi is betting on the growth story that is developing in Africa, where many investors and corporates are buying and leasing land at relatively cheaper rates for crop production. Karuturi bought around 311,700 hectares of land on lease in Ethiopia to start agricultural cultivation in a phased manner. It plans to grow crops like cereals, sugar and palm, which could be exported.
Karuturi, whose rose export accounts for most of its revenues right now, annually produces around 555 million stems of cut roses which are exported to markets like the US, Europe, Japan, Russia and Australia. It has an area of 239 hectares in countries like Kenya, Ethiopia and India under green house for this. The company became the world's largest rose exporter after it acquired Ethiopia’s Sher Agencies for $68 million back in 2007.
Karuturi Global reported an increase in revenues in FY10 to Rs 532 crore from Rs 445 crore, and a rise in et profit to Rs 146.5 crore from Rs 117 crore for FY09.