Soros’ Aspada invests in vertically-integrated Indian fruit producer

Aspada Investment Company has invested $3.2m into InI Farms, a vertically-integrated horticulture company. Kushal Agrawal, chief financial officer, discusses the sector's opportunities.

Aspada Investment Company, a Soros Economic Development Fund (SEDF) investee company, has invested Rs200 million ($3.2 million; €3 million) into InI Farms, a vertically-integrated horticulture company focused on pomegranates and bananas.

The investment was made out of Aspada’s second fund, an open-ended vehicle that has invested around $30 million into eight investments so far. SEDF is the sole LP at this stage, although that could change soon, said Kushal Agrawal, Aspada’s chief financial officer.

This is the fourth agriculture-related investment for Aspada, which focuses on investing in companies that provide essential services, market linkages and access to finance. It also has investments in energy, healthcare and education.

InI Farms is India’s largest producer of pomegranates, and controls supply chain logistics and distribution of the fruit. It also provides farm extension services for smallholders, and post-harvest management and processing for domestic consumption and export markets.

The investment will enable the firm to expand its current operations and into other fruits, according to a press release.

“Over the next 24 months, we will be expanding our sourcing belts by expanding into adjoining regions of Maharashtra, Madhya Pradesh and Gujarat, while also bolstering farm extension activities and augmenting processing capabilities so as to work with many more small-hold producers to enable market linkages for their produce,” said Purnima Khandelwal, chief executive of InI Farms in a statement.

InI has received investment from other early stage investors including Unilazer Ventures and Aavishkaar along with angel investors like Pavan Vaish and Ashish Gupta.

Last June Aspada invested Rs200 million in Schedulers Logistics India Private, which focuses on end-to-end cold trucking in India.

“In India cold trucking is a very fragmented market; most investments that take place in cold chain supply in India are focused more on warehousing than trucking but this company is trying to access small enterprises in India that don’t have access to cold trucking because their supply is too small,” Agrawal told Agri Investor.

While Aspada has focused less on production efficiency and more on market linkages, there is a lot of scope on the production side, as long as projects are scalable, said Agrawal.

“There is a lot of scope of increasing productivity in the agri sector in India and we are looking at it actively, but we do not want to take too much intellectual property risk, such as specific seed technologies, or on inputs like fertilisers, because we don’t have experience in those spaces as a team,” he said.

Aspada typically invests in a five-to-seven year horizon, and can go further, according to Agrawal.

“We can invest for longer if needs be and, especially in agri, there are unknowns that can affect performance such as the weather, so we don’t want to leave companies in the lurch by pushing for an exit,” he said. “We have invested in a lot of companies that are approaching a market segment for the first time and they are already market leaders. There is a lot of scope in agri investment in India.”