CapAleph Advisors eyes Rs 125-crore private equity fund to seed agriculture companies

MUMBAI: Spice maker Eastern Condiments’ promoters, the Meeran family, are turning into anchor investors for a new fund targeting early stage investments in food and agriculture.

CapAleph Advisors, founded by former India Value Fund (IVFA) partner George Thomas, hopes to raise Rs 125 crore private equity fund from domestic institutions and HNIs by December this year. The Bengaluru-based firm plans to follow this up with a similar sized debt fund.



“Food & agriculture is one of the backwaters in India which is under-invested. By providing both equity and debt to entrepreneurs, we want to become the first hybrid investment platform in the space,” said Thomas, a former executive at FMCG giant Hindustan Unilever. CapAleph would be entering a market where investors like Omnivore Partners, SEAF's India Agribusiness Fund and Rabo Equity Advisors have been building up a portfolio over past few years. But there's a huge opportunity for more investors as well.

“Around 95% of the companies in the food and agriculture space have revenues of less than Rs 100 crore, so the capital requirement is primarily to set up a new facility or distribution centers or getting technology in the B2B space,” said Hemendra Mathur, MD of Rs 250-crore SEAF India Agribusiness Fund which has backed 8 companies in the space. CapAleph expects to invest Rs 5-25 crore in each company, and take significant minority stake in these ventures, typically over 40%. The firm expects to source the deal flow from professors in agriculture universities, food labs of MNCs like Pepsi and Unilever, besides government labs.

Around Rs 25-30 crore of the corpus will come from the Meeran family, which set up Eastern Condiments in 1989 with group turnover pegged at over Rs 800 crore.

Kochi-based group chairman Navasas Meeran said the investment is a “testimony to our family’s long standing commitment to support entrepreneurship in food and agriculture space in India and other relevant markets.”

The Meerans and CapAleph also plan to set up an incubator for entrepreneurs in this space, which will back 3-4 ideas every year, putting in capital of around Rs 20 lakh each.

Thomas was initially raising a Rs 900 crore SME-focused fund with CapAleph, but as the economy took a hit, he went back to the drawing board for a smaller one.