TVS Capital, IFC invest in Indian rice company

Private equity funds TVS Capital and International Finance (IFC) have jointly invested Rs1.24bn ($24.25m) in Indian basmati rice processing firm Dunar Foods.

India-based TVS Capital has put in INR500m ($9.78m) through its first fund TVS Shriram Growth Fund IA, which has the aim to nurture India’s mid-cap businesses into world class companies.

IFC has provided the remaining investment as the lending arm of the World Bank,.

Dunar Foods managing director Surender Gupta said that TVS Capital understands the rice business and the company is certain to achieve greater growth in the future by this association.

"The investment by the two leading private equity funds demonstrates the robust business model of Dunar Foods and its competitive edge in the basmati rice business," Gupta added.

Dunar, based in the northern Indian state of Haryana, was established in 1956 and is specialised in the procurement, processing and supply of basmati rice, with annual revenues of over Rs10bn ($195.60m).

The company mainly produces its products for the domestic market as well as for exports to the Middle East, Europe and the US.

Dunar has production facilities in Haryana, Punjab, Madhya Pradesh and Uttar Pradesh, with a combined capacity of 50t per hour, which it plans to double in three years.

Surender Gupta and his family currently own about 91% in the company, while the rest is held by the company’s management.

TVS Capital managing director Gopal Srinivasan said the firm believes in Dunar’s growth potential because of the scope of the global branded rice business.

"Dunar is the 10th investment from the fund, which brings us close to the completion of investing from Fund IA," Srinivasan added.