Low-Sugar Diet: Dar Capital To Invest In Stevia Cultivation

By Shrija Agrawal

  • 21 Apr 2010

Dar Capital has found a sugar-coated investment opportunity in the sugar substitute space. The private equity firm--which has till now invested in themes like media & entertainment, films and real estate--is playing anchor investor in a $40-million Stevia cultivation initiative that spans the geographies of Africa and India. Stevia is the wonder sweet herb used as a healthy alternative sweetener to sugar. 

The investment will be routed through DAR Agro & Products Limited, an investment vehicle floated by the company for the purpose.  The investment vehicle, a joint venture between the DAR Group (80%) and an African firm, will see the PE fund cultivating, processing and selling Stevia in Uganda.

The total project cost would come to $35-$40 million with DAR Capital investing around $5-$6 million as its share of equity. The project has an equity to debt mix of 40:60 with DAR Capital bringing in 20% of equity.The remaining equity component will come from third party limited partners who have expressed significant interest in the project.


“One of the key things is that we have gone into an MoU with one of the biggest producers of Stevia to invest in the processing plant,” said Arun Rangachari, Chairman, DAR Capital. Large stevia producers like GLG, PureCircle and Sunwin are ramping up their capacity in China and beyond. China is currently one of the largest stevia producer in the world, 80% of which is exported.

DAR Capital has already financed a pilot project of Stevia farming in Shirdi in India. A lot of beverage companies and carbohydrated drinks are increasingly relying on Stevia for the diet version and the market opportunity of the product is huge, added Rangachari.

The project is essentially betting on the growing market for natural sweetener, as India has the world's highest number of diabetic people increasing at an alarming rate. “It is a huge market opportunity. The worldwide sugar consumption is going down and is getting replaced by low calorie sweeteners. Stevia is 0% calorie, 100% more sweeter and 100% natural”, said Rangachari.


The Uganda project targets Stevia farming across 5,000 acres of which 500 acres have been acquired. The project, which is in the investment mode, is being handled by Charles Campbell and Anand Behl handling the real estate and agriculture division respectively at DAR Capital. The private equity fund has earlier invested in AgBio, India -  a joint initiative, between DAR Capital Group & the Valuable Group, for controlled condition farming.  DAR currently manages funds across real estate, media & gaming, sports, agriculture etc.

Stevia is not the only new space DAR Capital is entering. The PE fund has recently also invested in art in Italy by buying out the IP (intellectual property) rights of an artist (painter) and is working with other co–investors in institutionalising it. Rangachari, who refused to divulge the name of the artist, said, “his work had to revived because he leaves a generation behind”. Like all other investments, this will also be anchored by DAR with investments from other private equity funds.

It has so far invested $21.37 million in Valuable media, a movies & entertainment company, $71 million into IPL theatrical rights (broadcasting), and an undisclosed amount in Valuable Ag-Bio Pvt Ltd ( an artificially controlled plantation). DAR Capital also houses a film fund to invest in regional & non regional films.


In 2009, the Dubai based investment advisory and private equity firm emerged as the highest bidder for the theatrical rights for the cricket phenomenon Indian Premier League. Dar Capital-owned Entertainment and Sports Direct won the deal with Rs 3.30 billion bid.

The 10-year deal, which is valid from 2010-2019, will give ESD the exclusive exhibition rights for audiences in cinema halls, stadia, water borne vessels, buses, trains, armed service establishments, hospitals, bars, hotels, restaurants, airports, railway stations, shopping malls, offices, construction sites, oil rigs, clubs, auditoriums, spas, salons and other similar public venues.

Rangachari says, they hope to break even on the investment by the next year. Riding high on the exclusive IPL theatrical rights, he added that the sport has a huge fan following not only domestically, but also in international markets. Entertainment & Sports Direct (ESD), promoted by Dar Capital Group, has joined hands with Al Nisr Cinema and Gulf Films to showcase IPL in high definition quality in cinemas, theatres and malls across Dubai.  IPL is now being screened across more than 20 such centres in Dubai. Rangachari added that they will look to replicate the model for other sport formats like T20 WC, Hockey Golf and F1. They will look to monetise the model in other ways also like getting ad fee revenues and installations. Currently, the model allows for installing a set top box at the venue and broadcasting the sport in high definition.


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