Morgan Stanley invests in Indian castor oil maker

The INR 1.82bn deal marks the first investment in India from the bank’s third dedicated Asia fund and will help Biotor expand its international footprint.

Morgan Stanley Private Equity Asia, the bank’s Asian private equity wing, has invested INR 1.82 billion ($37.4 million) in Biotor Industries, a castor oil manufacturer in India, in return for a “significant” minority stake.

Biotor is the world’s largest fully integrated producer of castor oil and castor derivatives, according to its website. It operates across the entire value chain, from contract farming of castor seeds to wholly owned retailing operations in Europe and the United States.

The partnership will provide Biotor with “access to Morgan Stanley’s global franchise and relationships, which we believe will prove invaluable as we aim to increase our international presence,” said Rajesh Kapadia, managing director of Biotor.

The investment, which was made out of the $1.5 billion Morgan Stanley Private Equity Asia III Fund, is also the fund’s first transaction in India.

“A significant portion of the fund will be deployed in India over the next 18 months. We have a big pipeline in place and will focus on growth and buyout transactions, in sectors such as healthcare, education, infrastructure services, energy and specialty manufacturing,” said Srinavasa Rao Aluri, managing director of the firm’s Indian operations.

“It is a good time for private equity investment in India as the reality of valuation expectations are setting in,” Aluri added, pointing to the trend of companies turning to private equity firms for capital as the Indian stock market continues to plummet.