bw businessworlowith rood production growing, india needs more storage and transportation capacity,...
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Logistics Sector Attracts Investor Interest
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With rood productIOn growing, India needs more storage and transportatIOn capacity, writes Parami!a Cha!!eljee
Fortigo, an early stage logistics venture that aims to solve the logistics and transportation problems lor small and medium businesses, was recently in news lor rts prospective investment by Inlosys co-Iounder Nandan Nilekani and venture firm Accel Partners
Homegrown company in the Indian agri-warehousing sector Sohan Lal Commodity Management. recently raised rts lourth round ollunding - about Rs 1 ()() crore - lrom private equity lirm Creation and existing investor, Everstone Caprtal.
These are not the only ones There is a burgeoning list 01 companies - both startups and established companies in the logistics space - that are increasingly attracting investor interest as the importance 01 augmenting India's storage capabilrties gets crrtical
Currently, there is a paucity 01 warehouses in India. especially in the agricuRure sector. In lact with the increase ollood production in the country. the marketable surplus 01 agricuRural produce exceeds India's storage capacity
For inslance, ~ the country had approximately 159 million metric tonnes ollood grains as marketable surplus in 2013-14. rt is yetto have the combined storage capacity to handle the addrtional quantity. 1\ is this wide gap that is giving rise to a business opportunity which in turn is prompting risk caprtal investors such as private equity and venture caprtallunds to invest in the sector
Whats more. while established companies in the agri-Iogistics and cold chain industry are receiving lunding lrom investors to expand their business, even those who locus on providing back-end support in the ecommerce rush are increasingly evincing investor interest. Recently, Peepul Caprtal made over six-Iold a return on rts investment that rt had made in logistics lirm Ecom Express
Corporate lav.yers on condrtion 01 anonymity reveal there are qurte a lew private equity deals that are in advanced stages 01 discussion in the logistics space. For instance. ColdEX Logistics, a cold chain company that provides support and distribution services to well-known international brands including Burger King Subway, Domino's Pizza and Starbucks, is currently in talks with a host 01 private equity investors to raise about $80 millIOn. In December 2010 rt had raised $10 millIOn lrom India Equity Partners In lieu 01 a signifICant minority stake Investments indeed have started picking up in this sector Starting 2012, private equity investors have inlused around $275 million in the sector. as per data available with research lirm Venture Intelligence
Recently . Canadian investment giant Fair/ax invested $126 million in National Collateral Management Services LId. a private -sector agricuRural commodrties storage company headquartered in Gurgaon
Other prominent deals in the sector include Temasek's $40 million investment in Star Agriwarehousing and Collateral Management. a post-harvest solutions company locused on empowering larmers and Mandala Caprtal Fund 's $25 million lunding in logistics firm Gati Kausar. The company, which has a network 01 cold warehouses, transports relrigerated goods across sectors including heanhcare meat. pouRry, and biopharma. among others
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