Rabo Equity’s India nutrition play

Contrast this with nutraceuticals - the burgeoning market for nutritional food and beverage supplements - which has not suffered from the same constraints. The sector continues to see compound annual growth of 18.46%, according to India's Ikon Marketing Consultants.

Beloorbayir Biotech, the Bangalore-based drug developer that recently received INR750 million from Rabo Equity Advisors, was one of the early movers in this space.

Set up in 1981, the company produces a range of drugs that address high blood pressure, heart disease, obesity and diabetes. It also has a fast-expanding nutraceutical business, manufacturing ingredients for food and beverage brands targeting the health and wellness market.

"Nutraceuticals has been one our favorite sectors, and we have been tracking it for a number of years," explains Rajesh Srivastava, a managing director with Rabo. "It is growing fast in India but it still has a small base. So far, the biggest opportunity has been in supplying developed countries."

The global nutraceutical products market is expected to expand from $175 billion in 2013 to $204.8 billion in 2017, by which point the nutraceutical ingredients market will be worth $29.5 billion. Asia Pacific is set to become the second-largest geography with a 30.4% share, trailing North America's 39.2%.

According to Srivastava, Beloorbayir will use part of Rabo's capital to further expand the business into overseas markets. The company plans to set up a new facility in the US and invest more in research and development and marketing in order to support brand building. There will be a simultaneous effort to tap growing domestic demand.

"Beloorbayir currently supplies the big manufacturers, so it does not produce consumer-facing nutraceutical products, and it can be difficult to launch a brand in US or Europe," says Srivastava. "However, the company will look at launch a few brands in India within the next 18 months."

Beloorbayir represents the last investment from Rabo Equity's first India Agribusiness Fund, which is now fully deployed, having committed capital to 12 companies. Previous investments include Maharashtra-based Prabhat Dairy, Super Agri Seeds, Daawat Food, Sri Biotech Laboratories and National Collateral Management Services.

Rabo Equity is currently nearing a $100 million first close on its second India Agribusiness Fund, which launched in December 2012 with a target of $200 million.

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• Topics
• Healthcare
• South Asia
• Expansion
• Rabobank Private Equity
• India
• healthcare
• Growth capital