Pune-based Adinath Agro Processed Foods, which sells ketchups and sauces, has received an undisclosed funding from private equity fund Carpediem Capital in exchange of a significant minority stake.

Infina Finance, an investment company jointly owned by Kotak Mahindra Bank and the Kotak family, has also co-invested in the firm.

Adinath Agro sells under the brands ‘Surabhi’, ‘Winn’ and ‘Magic King’. It also sells sauces for the Jain community (without onion or garlic). The company, promoted by first generation entrepreneur brothers Nitin and Rajesh Gandhi, would utilise the funds for capacity expansion and widening of distribution reach.

First funding

“This is our first funding, and we will use the proceeds to increase the manufacturing capacity by about 80 per cent. Further, we will also use the funds for automation of our packaging lines,” said Rajesh Gandhi, Director, Adinath Agro.

The company has its manufacturing facility located at Jejuri, near Pune, with a present manufacturing capacity of 10,000 tonnes. Adinath Agro proposes to increase this to 18,000 tonnes by June 2016.

Expanding markets

Further, it will use to proceeds to foray into markets across Karnataka, Gujarat, Telangana and Andhra Pradesh, which is expected to be completed by FY17-end. At present, its distribution reach is limited to Maharashtra and Goa.

Candle Partners was the financial advisor to Adinath Agro.

“We see an opportunity in creating a national company and also a regional leader across certain other markets in the country. The industry, as per estimates available is currently at ₹1,200-1,400 crore and is growing in double digits,” said Hithendra Ramachandran, Managing Director of Carpediem Capital.

“Adinath Agro is growing better than the industry,” he added.

Carpediem Capital is an India-focused PE fund with an investment focus on small and medium business enterprises in the consumer and service sector.

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