Sahyadri sets up subsidiary for fundraising, IPO on cards

The 12th annual general meeting of Sahyadri Farmers Producer Company at the Sahyadri campus in Mohadi, Dindori, in Nashik was very significant. The Farmer Producer Organisation (FPO) has formed a new subsidiary to raise capital from overseas and scale up business. There is talk of an initial public offering as well. The horticulture-focused firm has already gotten the regulatory approval to separate its post-harvest business division into a new corporate body. Sahyadri Farms Post-Harvest Care Limited, the 100 percent subsidiary of the FPO, is going to house all the post-harvest business, including the processing business, logistics, retail, and new lines of business.

According to Vilas Vishnu Shinde, CMD at Sahyadri Farmers, Sahyadri Farms raised Rs 310 crore last month from a group of European impact investors who picked up a 16.6 percent stake in the organisation. Shinde further stated that Sahyadri is about to go public with a public issue planned in the next 3-4 years. For the farmer producer companies, this could be the first-of-its-kind listing.

A total of 731 farmers own Sahyadri with 681 farmers directly owning the company and the rest via 48 farmer producer companies (FPCs). Shinde, who is a first-generation entrepreneur, and his family, holds 52.8 percent in SFPC, 14.3 percent is held by large farmers and FPCs and 32.9 percent is owned by marginal and small farmers.

In 2019, Sahyadri entered into a contract manufacturing partnership with Hindustan Unilever for the Kissan brand with production lines for ketchup, squash, jams and beverages. This has given them the confidence for making a foray into the retail segment with their own brand of ready-to-eat and value-added food products. Sahyadri supplies to some big brands like Tesco, BigBasket, Hindustan Unilever (HUL), Mother Dairy, Del Monte, Veeba, Reliance and Nature’s Basket.

The firm’s FY22 revenues stood at Rs 785.7 crore, EBITDA at Rs 66.4 crore, and net profit at Rs 23 crore. Around 71 percent of revenues are from the Sahyadri Farms Post Harvest Company. For FY23, the corporation has set a revenue target of Rs 1,191 crore and EBITDA of Rs 140 crore.

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