ILabs takes 50% stake in Viswas Business, a farm retail firm

WEEKS after investing Rs 23 crore in pharmaceutical retail chain Med-Plus, Hyderabad-based investment firm iLabs is betting big on a farm retail firm. ILabs has picked up 50% stake in Viswas Business Synergies (VBSL), also from Hyderabad. While company officials declined to disclose the quantum of funds invested, it is expected to be around Rs 30 crore. With 50% stake in VBSL, iLabs will also have a presence on the board.
Viswas Business Synergies is a oneyear-old company with around 125 retail outlets in Andhra Pradesh selling agricultural inputs like seeds, pesticides, fertilizers and sprayers apart from offering advisory services.
‘‘We are raising funds of about Rs 60 crore-Rs 70 crore to increase the number of retail outlets to 300 by the end of this fiscal. Our need for funds will be met by debt and equity in the ratio 50:50,’‘ said Mr Sekhar N Chandra, managing director, VBSL. The working capital needs for expansion is around Rs 500 crore.
The number of retail stores in Andhra would go up to 230 by July this year, coinciding with the end of the kharif season. VBSL will also add 30 stores each in Karnataka and Tamil Nadu by the same period.
The company is also eyeing the north with presence in Madhya Pradesh, Maharashtra and Chhattisgarh by the next fiscal, to take the total number of retail outlets to 475.
VBSL has entered into a tie-up with National Commodity & Derivatives Exchange (NCDEX), whereby it would provide training and advisory services to farmers cultivating chilli and turmeric. VBSL will also help in procurement of output from farmers and transfer it to NCDEX. It has also entered into an arrangement with MetLife Insurance to sell life insurance policies to farmers. It already has a tie-up with ICICI Lombard to provide weather insurance and has offered close to 15 000 policies.