Private equity firms invest INR2.3bn in Indian edible oil company

New Silk Route has invested INR1.35bn in K S Oils, while existing investors Citigroup Venture Capital International and Baring Private Equity Asia will each invest INR490m.

Indian edible oil company K S Oils is raising INR2.33 billion ($49 million; €36 million) from private equity firms New Silk Route, Citigroup Venture Capital International (CVCI) and Baring Private Equity Asia.

The capital will be raised through the issue of equity shares and convertible warrants, according to a K S Oils spokesman.

Headquartered in Morena in central India, K S Oils produces a range of mustard and refined oils. The company is the largest processor of mustard seeds in the country, according to its website.

New Silk Route has invested approximately INR1.35 billion for a stake of roughly 8 percent in K S Oils, the spokesman said. New Silk Route was not available for comment.

CVCI and Baring, both existing investors in K S Oils, will each invest INR490 million in the company, through the subscription of convertible warrants. Upon completion of the transaction, CVCI will hold a stake of approximately 11 percent stake in K S Oils and Baring will hold a stake of roughly 7 percent. 

CVCI first invested in K S Oils in 2006. CVCI and Baring were not available for comment.

The owners of K S Oils will also invest about INR1.57 billion through the subscription of convertible warrants. Another INR600 million will be raised through an issue of global depositary receipts.

The capital raised will be used to expand the company’s refinery in Haldia, in east India. It will also be invested in the company’s palm plantations in Indonesia.

At the end of March, K S Oils saw net profit rise 41 percent from the previous year, to INR1.7 billion. The company is listed on the Bombay Stock Exchange and the National Stock Exchange. K S Oils’ shares were trading at INR 53.10 at time of press.

Founded in 2006, New Silk Route is an Asia-focused growth capital firm with more than $1.4 billion under management.

Established in 2001, CVCI is a private equity investor focused on growth markets.

Baring Private Equity Asia closed Baring Asia Private Equity Fund IV on $1.52 billion in May 2008. The fund provides growth capital and makes mid-market buyout investments. The firm currently manages assets of more than $2.5 billion across four funds.