Everstone, Mayfield, others part exit India's SLCM
Everstone Capital, Mayfield Advisors, Nexus Venture Partners and ICICI Bank have part exited their stakes in Indian agricultural logistics and financing firm Sohan Lal Commodity Management (SLCM).
Impact investors Incofin Investment Management, of Belgium, and Switzerland’s ResponsAbility Investments bought the firms’ stakes for $20 million, according to a Livemint story linked from SLCM’s website. The new investors hope to help the company expand both its Indian financing business and its recently launched venture in Myanmar.
SLCM offers warehousing services to agriculture professionals such as farmers and processors, along with commodities traders. Its facilities are designed to accommodate the special needs of a wide range of products, including both foods and other types of commodities such as cotton and chemical products. Currently the company has more than 1,500 warehouses under management with over 22 million square feet of storage space.
“SLCM is a very process-driven company. Agri is a very volatile market: a lot depends on the monsoon, and there is also price volatility,” said Aditya Bhandari, co-head for Asia at Incofin. “One of the biggest weakness of this segment is that companies and teams don’t have a very strong hold on processes. A scalable business can only be built when the company and the team is very process-driven.”
Along with warehousing, SLCM also offers financing services through Kissandhan Agri Financial Services, its non-banking finance company (NBFC). The subsidiary has disbursed INR8.2 billion ($125 million) in loans over the last three years.
The SLCM investment fits with Incofin’s financial services-focused investments in India so far. The firm joined Creation Investments and MicroVentures for a INR532 million round for Grameen Koota in 2013 and participated in a INR300 million round for Annapurna Microfinance the following year.
Nexus has supported SLCM since 2010: AVCJ Research records a INR100 million investment by the firm that year, followed the next year by a INR355 million round alongside Mayfield. Everstone and ICICI joined the existing backers for a INR1.3 billion round in 2012, taking stakes of 25.6% and 6.9% respectively. In the company’s most recent funding round in 2015 Everstone joined Creation Investments Capital Management to commit INR1 billion.
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