Morgan Stanley Private Equity Asia has invested Rs 152 crore ($23 million) in Southern Health Foods, which markets its products under the brand ‘Manna Foods’.
The Chennai-based firm will use the funds to expand down the south and provide part exits to existing investors, Morgan Stanley said in a statement.
The company had earlier raised Rs 30 crore from early growth investors led by Fulcrum in 2015.
“The partnership with Morgan Stanley will help Manna Foods write a success story in health foods space in India,” said ISAK Nazar, founder of the firm.
The company, which was launched in 2000, offers ready to cook millet-based infant food, millet grains, soya nuggets, dried fruits, purees and pastes. Manna Foods claims to have a network of over 500 distributors that cater to over 60,000 retail outlets across 350 towns in India.
“Foods based on home-grown grains such as millets are regaining popularity, offering great nutritional content at an affordable cost,” said Arjun Saigal, co-head of Morgan Stanley Private Equity Asia in India.
Along with this, the investment firm also led a round in medical devices maker Sahajanand Medical Technologies Pvt. Ltd.
Morgan Stanley established its PE business in India in 2008. Its earliest investment the same year in Biotor Industries went under water after the founders were booked for fraudulent activities.
In June 2014, the firm’s then managing director Aluri Srinivasa Rao had told VCCircle that the fund had made a soft commitment of around $250-$300 million for India.
Since then, Morgan Stanley PE has invested in Janalakshmi Financial Services, most recently in 2016 along with other investors such as TPG. Its initial investments in Janalakshmi were in 2014 and 2013. In June 2016, Morgan Stanley PE also invested in Five Star Business Finance.
Several investors have backed companies focused on ready-to-cook meals in the recent past. In October 2017, Maverix Platforms Pvt. Ltd, which runs ready-to-cook food brand Fingerlix, has raised $7 million (Rs 45 crore) in a Series B round of funding from Accel Partners and existing investor Zephyr Peacock India.
In August last year, American food company Mars Inc, best known for its confectionery and pet food business, has offered to buy the shares held by public shareholders in Tasty Bite Eatables Ltd, which mainly exports its ready-to-heat food products.
Prior to that, Mumbai-based packaged food startup Yumlane raised nearly Rs 6.6 crore in a seed round of funding led by Flipkart co-founder and CEO Binny Bansal.
In May, Bengaluru-based packaged foods company Maiyas Beverages and Foods Pvt. Ltd raised Rs 200 crore from investors led by private equity firm Peepul Capital. The same month, Chennai's Mambalam Iyers Food Products Pvt. Ltd raised its Series A round of funding.