Sahyadri sets up subsidiary to raise funds, IPO also on the cards

The buzz at the recently held 12th annual general meeting of Sahyadri Farmers Producer Company at the Sahyadri campus in Mohadi, Dindori, in Nashik was different this time. The farmer producer company (FPO) has created a new subsidiary with an aim to raise capital from overseas to scale up their business. An IPO is also on the cards.

The horticulture-focused company has already received the regulatory approval to hive off its post-harvest business division into a new corporate entity. The 100% subsidiary, Sahyadri Farms Post-Harvest Care Limited, will house all the post-harvest business, including the processing business, retail, logistics, and new lines of business.

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Shinde added that Sahyadri would be going public with an IPO planned in the next 3-4 years. This could be the first-of-its-kind listing for farmer producer companies.

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

The company’s FY22 revenues were at Rs 785.7 crore, Ebitda at Rs 66.4 crore, and net profit at Rs 23 crore. Around 71% of revenues come from the Sahyadri Farms Post Harvest Company and the company has set a revenue target of Rs 1,191 crore and Ebitda of Rs 140 crore for FY23.

Sahyadri supplies to some big names such as Hindustan Unilever (HUL), Tesco, BigBasket, Mother Dairy, Del Monte, Veeba, Reliance and Nature’s Basket.

Sahyadri got into a contract manufacturing partnership with Hindustan Unilever in 2019 for the Kissan range of products with production lines for ketchup, jams, squash and beverages. This has given them the confidence of making a foray into the retail segment with their own brand of value-added and ready-to-eat food products.

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Sahyadri currently sources from Maharashtra, Karnataka, Gujarat, Andhra Pradesh, Rajasthan, Kashmir and Himachal Pradesh. They will expand into Punjab, Kerala, Tamil Nadu, Telangana and the NorthEast. Multiple pilots are going on for a direct retail business and to supply directly to street vendors and retailers.

“12 years of groundwork, restructuring of operations and the recent funding will see Sahyadri get into a new growth phase,” Shinde said.