Mumbai: Fairfax India Holdings Corporation today announced that it has agreed to acquire approximately 74 per cent in commodities storage and services firm National Collateral Management Services (NCMSL), through its wholly-owned subsidiary FIH Mauritius Investments, for about Rs 800 crore.
“Fairfax India will acquire approximately 74 per cent stake in NCMSL for approximately Rs 800 crore (approximately USD 126 million). The transaction is expected to be completed later in 2015,” Fairfax India said in a statement here.
“We are looking forward to investing in National Collateral which will continue to build on its position as the largest private-sector agriculture warehouse and grain collateral storage company in India,” Fairfax India chairman Prem Watsa said.
“Our long-term approach to investing will allow it to take advantage of the substantial market potential in India by offering competitive, market-driven solutions for India’s agriculture warehouse and grain storage industry.
“In researching this investment, we had the advantage of expert diligence that was conducted by AFGRI Holdings, Africa’s largest grain storage company, which has been in business for over 90 years. Fairfax Financial owns 40 per cent of AFGRI,” Watsa said.
National Collateral is in operation for over 10 years and now plans to expand to take advantage of the significant market potential in India’s under-developed agricultural storage industry.
The company operates in the mid-stream agriculture value chain by offering end-to-end solutions in grain procurement, testing, storage and collateral management.
Following the investment by Fairfax India, National Collateral will continue to operate independently under the leadership of Sanjay Kaul and his executive team.
Fairfax India will also collaborate closely with the continuing National Collateral shareholders, which include National Commodity and Derivatives Exchange and a number of Indian banks, it added.