Temasek Backs StarAgri with 240-cr Investment

Indias largest post-harvest agri solutions provider had earlier raised.150 cr from IDFC PE 

Singapore state-owned investment company Temasek Holdings is investing.240 crore for a significant minority stake in Star Agriwarehousing and Collateral Management Limited,one of the countrys fastest growing agrisolutions companies.Started by four former franchisees of rural lending products from Rajasthan in 2006 with deep family roots in commodity trading, StarAgri has emerged as one of the countrys largest post harvest agri-solutions provider offering modern and mechanised rural supply-chain infrastructure like farm procurement,logistics services,warehouses,labs and collateral finance.Known in the commodity trade as a company started by 1 Suresh and 3 Amits,StarAgri currently has a pan-India footprint of over 700 warehouses across 16 states and over 1.5 million tonnes of warehousing capacity.

It caters to customers ranging from banks to international bulk commodity buyers like Cargill,Bungee and food and FMCG companies like Britannia and commodity exchanges.While Suresh Goyal is the chairman and managing director of the firm,Amit Mundawala is in charge of operations with an eye on creating rural finance networks.Amith Aggarwal looks after finance and HR;with Amit Khandelwal is in charge of business development.When contacted,Amith Agarwal,co-founder and executive director of StarAgri,refused to comment on the issue.Mails sent to Temasek did not get a response till the time of going to press.

The investment reflects Temaseks growing interests in agrisolutions businesses and assets as rising populations and emerging middle class boost food demand worldwide.

Last year,Temasek made its boldest bet in the space in India when it pumped in.572 crore for a 19.9% stake in Godrej Agrovet,a diversified agribusiness company of the eponymous group,furthering its partnership with the conglomerate.Last month,a unit of Temasek offered to buy Olam among the worlds top three coffee and rice traders in a $4.2-billion cash deal.

Sources aware of the developments said the fund from Temasek will be used to create further infrastructure,better technologies and private mandis with a special focus on states like Madhya Pradesh,Rajasthan,Gujarat and Maharastra.Such one-stop solutions are aimed at reducing crop wastage and build efficiency in the agrisupply chain

.These mandis marry the efficiencies of a physical marketplace with international price discovery mechanism benefiting farmers as well as buyers like millers and agro-processors.Temasek will provide second round of funding to the company,reinforcing large-scale institutional backing at a time when the entire commodity trade has been much maligned due to empty godowns and fake NSEL trades.In 2011-12,IDFCs private equity fund had invested.150 crore for another large chunk in the company.

The two funds put together will own a significant minority shareholding in the company.Sources add that IDFC PEs investment has already trebled in just two years.Given the exceptionally high amount of food wastage in India,global PE investors are showing interest in agri-logistics,drawing high valuations for their scalable and high growth businesses.

According to Venture Intelligence,PE firms have invested about.940 crore in 11 companies in the sector in the past three years.Analysts say,agri-warehousing accounted for approximately 15% of the warehousing market in India which is worth.8,500 crore.

BJP-led Govt May Not Push PSU Stake Sale,Says Shourie

A Narendra Modi-led government is unlikely to undertake any big-ticket asset sales,at least early in its term,as the Gujarat chief minister has faith in the ability of the public sector to turn around and he wouldnt want to fritter away political goodwill,said Arun Shourie,who was disinvestment minister in the Bharatiya Janata Party led National Democratic Alliance government.This will mean that Indias record on privatisation is unlikely to improve in the near future.The incumbent Congress-led United Progressive Alliance government has fallen woefully short of its disinvestment target.

During his tenure,Shourie oversaw the sale of government stakes in companies such as Videsh Sanchar Nigam,Maruti Suzuki and Hindustan Zinc.Modi believes that PSUs (public sector units) can be turned around, Shourie said in an ET Now interview.

He has done it in Gujarat State Electricity Board and so on,so his preliminary thing would be not to do anything on this matter (privatisation ) and secondly it is not something on which he will expend political capital in the beginning. Modi will focus on unshackling the economy,implementing policy,simplifying procedures and setting up large infrastructure projects,Shourie said.

His forte is implementation,so he will focus on that.For instance,which are the bottlenecks coal production,coal transportation,we do that.Okay,instead of iron ore or bauxite exports,we should have value addition in India.What is holding it up,he would do that, Shourie said.He is very firm on... ease of doing business. 

Modi will also be keen on large infrastructure projects and will be impatient with hurdles in the way of such development.For instance, infrastructure in the north east is certainly something all of us would urge.It is neglected... and therefore he would not let environment and other ministries come in the way, Shourie said,particularly since this also relates to border security.

For instance,if the Border Roads Organisation is unable to get roads completed to a certain standard and on time,he would ask for a company like Larsen & Toubro to be roped in,the former minister said.When it comes to manufacturing,Modi would also want to open up certain closed sectors to the private sector.

For instance,defence production.We know that engineering and technical capability has been built up outside the governmental structure,which can help in the security of the country that has not been used,and when it is used,good results follow, Shourie said.

HSBC settles actors plaint over MF losses

Mumbai: Four months after market regulator Sebi issued HSBC a show-cause notice on why it should not be barred from accessing the securities market for fraudulent churning on a complaint from actor Suchitra Krishnamoorthi,the bank has settled her losses.While the amount cant be disclosed due to a non-disclosure clause,the actor said her losses have been amicably settled and reimbursed.

She had deposited Rs 3.6 crore in mutual funds at the bank and the settlement would have covered that and more.The actor had been fighting a four-year-long battle with the global banking major after she deposited the amount in her HSBC account for investment in an MF portfolio.

The assured profits and growth of my money never happened, she said when she complained to Sebi in January,2013 against the bank for cheating and misrepresentation.

She said she had been assured of a 24% return if she appointed the bank as her portfolio manager.However,she said in her complaint to Sebi that with four different relationship managers in five years she made no profits only losses.

The economic offences wing had dismissed my case without any explanation.I was shocked but appealed to Sebi.The officials at Sebi were supportive and firm and spent a year on my case.It was the show-cause notice they issued in November that was the scale tipper.Even RBI originally dismissed my claim and I had to reopen it, the actor told TOI on Tuesday.

She added,Everyone kept telling me it was an impossible fight but we forget that even corporations are made of people and somewhere everybody has a heart.I would not have fought so hard if I didnt absolutely believe I was right. 

An HSBC spokesperson declined to comment.

The Sebi probe had found excessive churning and that the money was invested in 38 different funds but not in line with her risk profiling.Sebis notice to HSBC said,The only plausible reason for this churning could be to earn more commissions.

Most China Stocks Fall as Investors Assess NPC, Chaori

Most Chinese stocks fell as investors weighed reform prospects at a legislative meeting and the Wall Street Journal reported Shanghai Chaori Solar Energy Science & Technology Co. failed to make a bond interest payment.

Poly Real Estate Group Co. slid 1.6 percent to drag down a gauge of property developers. Haitong Securities Co. paced losses for brokerages after profit dropped last month. Xiamen Tungsten Co. surged 9 percent to lead gains for material producers. China Petroleum & Chemical Corp. (386), the refiner known as Sinopec, jumped 3.1 percent after Premier Li Keqiang reiterated this week at the National People’s Congress that China would allow non-state capital in oil and power projects.

The Shanghai Composite Index (SHCOMP) fell 0.1 percent to 2,058.23 at 1:02 p.m., as three stocks slid for every one that rose. Investors are anticipating policies to help the economy move toward services and consumer spending, and away from the credit-driven construction that spurred growth in the past decade.

“There isn’t any exceeding of expectations from what has been announced at the meetings and the positives have been priced in the past few days,” Zhang Haidong, an analyst at Tebon Securities Co., said in Shanghai.“Investors are returning their focus to economic growth and the outlook for IPOs after the meeting.”

The Shanghai Composite has climbed 0.1 percent this week, poised for the first advance in three weeks. It has dropped 2.7 percent this year amid concern the resumption of new share offerings will divert funds and economic expansion will ease as banks tame lending.

The CSI 300 Index lost 0.3 percent today, while the Hang Seng China Enterprises Index (HSCEI) advanced 0.6 percent. The Bloomberg China-US Equity Index jumped 1.4 percent yesterday.

Debt Concerns

President Xi Jinping, who took office a year ago, pledged the broadest expansion of economic freedoms since at least the 1990s in November. Policy makers may unveil more details before the legislative meeting ends on March 13.

China set a 7.5 percent target for GDP growth for 2014, the same as last year, on the first day of the NPC. Finance Minister Lou Jiweisaid yesterday growth as low as 7.2 percent would meet this year’s target of “about” 7.5 percent as he tried to moderate expectations for an economy at risk from swelling debt.

The Wall Street Journal cited Board Secretary Liu Tielong as saying Chaori has failed to make the payment. The company was due to make a payment of 89.8 million yuan ($14.7 million) today. Calls byBloomberg News to the company’s investor-relations department weren’t returned.

Bond Defaults

The maker of energy cells to convert sunlight’s failure to pay would make it the first company to default on a bond in China’s onshore market, according to Guotai Junan Securities Co., the nation’s second-biggest brokerage. There haven’t been any defaults in the nation’s publicly traded domestic debt market since the central bank started regulating it in 1997, according to Moody’s Investors Service.

The number of Chinese companies with debt double equity has surged since the global financial crisis, suggesting the first onshore bond default by Shanghai Chaori won’t be the last.

Publicly traded non-financial companies with debt-to-equity ratios exceeding 200 percent have jumped 57 percent to 256 from 163 in 2007, according to data compiled by Bloomberg on 4,111 corporates. The yield on five-year AA- notes leapt eight basis points to 7.77 percent on March 5, the most in almost four months, after Shanghai Chaori said it won’t be able to fully pay a coupon due today on its March 2017 bonds.

“After the first one, there may be more defaults,” said Zhang Yingjie, Beijing-based deputy general manager in the research department of China Chengxin International Credit Rating Co., Moody’s Investors Service’s joint venture in China. “The domestic economy is slowing, liquidity is tightening globally and more bonds are maturing this year with greater refinancing pressure, so there may be more defaults.”

The Shanghai index is valued at 7.8 times 12-month projected earnings, compared with the five-year average multiple of 12.2, according to data compiled by Bloomberg. Trading volumes in the measure were 1.1 percent above the 30-day average for this time of day, according to data compiled by Bloomberg.