Corporatising Agriculture and Foreign Investors -Farmer-owned Sahyadri Farms has raised Rs 310 crore from a group of European investors By Jayashree Bhosale Sep 14, 2022,  https://economictimes.indiatimes.com/news/company/corporate-trends/farmer-owned-sahyadri-farms-has-raised-rs-310-crore-from-a-group-of-european-investors/articleshow/94202814.cms  Foreign investment story of Sahyadri FPO is now become the discussion points amongst all of us mainly in the development and FPO sector.

"Sahyadri Farms is today, servicing over 18,000 farmers, covering more than 31,000 acres and 9 crops. The capital coming from Korys, FMO, Proparco and Incofin is intended to further grow the company. Sahyadri Farms wants to expand its processing capacity for fruits and vegetables-based products, set up a biomass plant to generate electricity from process waste and enhance its infrastructure like packhouses," said the company release.
Rahul Rai, Partner at Incofin India said, "Incofin feels privileged to lead this investor consortium and its partnership with Sahyadri Farms to support its spread as a global role model of a partnership-based approach to farming that results in sustainable financial impact, climate change adaptation and inclusive growth in rural communities while creating a technology-driven, globally competitive business.” Incofin IM is an AIFM licensed fund manager and has over EUR 1 billion in assets under management.

Françoise Lombard, CEO of Proparco, the private sector financing arm of Agence Française de Développement Group (AFD Group) said, "Proparco is proud to become a shareholder of Sahyadri Farms, one of the largest players in the Indian fruit and vegetable sector, alongside Incofin, Korys and FMO.

Foreign Investors as Equity Holders in FPCs?

Foreign investment story of Sahyadri FPO is now become the discussion points amongst all of us mainly in the development and FPO sector. ..

Firstly, I would like to clarify here that FPC/FPO cannot sale or transfer share to any non producer individual or institutions. FPO/FPC can go for joint venture with other similar objective institution or company and can do investment maximum up to 30% of their paid-up capital or reserves. AS per clause 581ZL (1-5) of section 9A of the Company Act 1956 (Amended 2002 & Company Act 2013)

In case of Sahyadri it needs to be clarified that this foreign investment was not done in the Sahyadri Farmers Producer Company Limited but 2 year ago (21August 2020) Promoters of Shyadri Mr Vilas Shinde and others have formed a new Private Company namely Sahyadri Farms Post Harvest Care Company Limited where they have initially invested 166.25 Crore by 7 individuals namely 1. Vilas Vishnu Shinde ( MD of Sahyadri FPC) 2. Madan Vishram Shinde, 3.Prashant Dhirendra Jaikrishnia, 4.Mangesh Kisan Bhaskar, 5.Azhar Aliasger Tambuwala, and 6. Shriram Punjaji Dhokare and now they have mobilized 300 crore recently. They are keeping only one normal farmer in their board and you can also see his pic in their website too.

MD of Sahyadri FPO is also Director or promoters in 16 other companies and their details are as under :
1. ADVENT PLANTECHLIMITED LIABILITY PARTNERSHIP ( 16 October 2019)
2. SAHYADRI FARMS SUPPLY CHAIN LIMITED ( 1October 2020)
3. SAHYADRI FARMS MEGA FOOD PARK PRIVATE LIMITED ( 21 July 2014)
4. CENTRE FOR INTERNATIONAL TRADE INAGRICULTURE AND AGRO BASED INDUSTRIES 25 January 2021
5. SENSARTICS PRIVATE LIMITED ( 14 August 2020)
6. NEXTGEN NURSERIES LLP ( 9 Jan 2019)
7. SAHYADRI RURAL DEVELOPMENT FOUNDATION ( 22 Nov 2016)
8. SUSTAINABLE AGG SOLUTIONS LIMITED ( 27 Nov 2010)
9. SAHYADRI FARMERS PRODUCER COMPANYLIMITED ( 27Dec 2010)
10. SAHYADRI AGRO RETAILS LIMITED ( 25 July 2014)
11. EMPIRE SPICES AND FOODS LIMITED ( 13 Sept 2016)
12. NEXTGEN NURSERIES PRIVATE LIMITED ( 26 Jan 2019)
13. SAHYADRI FARMS SUSTAINABLE GRASSROOTSINITIATIVES LIMITED (4 Nov 2020)
14. ADVENT PLANTECHLIMITED LIABILITY PARTNERSHIP (Individual Partner) 16 October 2019)
15. SAHYADRI FARMS SUPPLY CHAIN LIMITED (Nominee Director) 1st October 2020)
16. SAHYADRI FARMS MEGA FOOD PARK PRIVATE LIMITED (Director) 21 July 2014

Similar to Mr Shinde all directors of SAHYADRI Group of Companies, owned 5-8 other companies like another Director Mr Madan Shinde is Director in 8 Companies like
SAHYADRI BANANA PRODUCER COMPANY LIMITED,
SAHYADRI AGRO TOURISM PRODUCER COMPANY LIMITED,
SAHYADRI POMEGRANATE PRODUCER COMPANYLIMITED,
SAHYADRI FARMERS PRODUCER COMPANYLIMITED,
SAHYADRI RICE PRODUCER COMPANY LIMITED,
SAHYADRI AGRO RETAILS LIMITED,
SAHYADRI FRESH FARMERS PRODUCER COMPANY LIMITED,
SAHYADRI FARMS SUPPLY CHAIN LIMITED

*Source: MCA Website GoI *

So I think we will now not compare to small farmers FPOs with big FPO like Sahyadri & so on

It shows that Mr Shinde and his partners has strong business background and they are good businessman. Now he is using the FPO platform for growth and expansion of their businesses which was not done during their private company time because of higher competition but now they are building their business in the name of FPOs. But no doubt its benefitting the grape producers of the area as they are getting the market and it’s a normal business case in any private company

Such type of story is now coming from several places where traditional merchant have registered producer company by using their all family members wife, brother, brother in-law, sister in-law, aunty etc and formed producer company and did business of 60 crore within 6 months of its incorporation without any financial support, nothing. You would be surprised how it happens ? but yes it happened here in Ashok Nagar District of Madhya Pradesh where a Mr Jain ( Big broker and known mandi merchant of the area who worked with Nafed as a buyer and broker for Govt MSP pulses sales) has formed this producer company and got work (despite of our
oppose) under PSS from Nafed where he has converted all private merchant’s stored Masoor and Tur of that region in the name of farmers and did highest business 100 crore (including masoor and Tur both) within a year and also got appreciation from Nafed and we along with several other small FPOs were declared poor performer FPO by nafed. Now Mr Jain of Ashok Naghar is become the most successful FPO director and very soon he will start several new pulses processing mills and export activities soon that he was unable to do as a individual merchant but now with support from organisation like Nafed and availing the subsidies from the Government, he will become successful FPO Man.
So this is the story of new successful emerging FPO model and I have nothing more to say

Yogesh Dwivedi, Madhya Bharat Consortium of Farmers Producer Company www.mbcfpcl.org

Post by Ashish:
There were discussions on how certain FPCs are buying back equity from the farmers and offering it to private equity investors. It looks like this is the first case in India.
Does anyone have an opinion if such an arrangement - where FPC equity (which must necessarily be that of primary producers) can be purchased and handed over to Foreign Private Investors? Or perhaps there is more to this than meets the eye of the news reporter?
Additionally what is the long term impact on smallholders for such a step? Is this FabIndia all over again?
Ashish