Netafim-backed NAFA raises USD 50 mn via Equity and ECB
Mumbai, April 26, 2021: Netafim Agricultural Financing Agency Pvt. Ltd. (NAFA), an agri-focused NBFC and a subsidiary of Netafim Singapore, has raised USD 40 million via external commercial borrowing (ECB) from the Phoenix Group and Cogito Capital, both Israel based investors. The raised funds will be utilized effectively for business expansion, enhanced offerings, and to expand horizons in the agri-rural domain. The company would successfully improve its margins as it intends to service the high-cost old debt and bring down the overall cost of funds.
The deal also marks fresh equity infusion into NAFA, which recently raised USD 9.4 million of Tier I Capital from Netafim Singapore and offered exit to the initial equity partners Atmaram Properties & Granite Hill Fund as they had reached their investment horizon. This is the maiden investment for both Phoenix Group and Cogito Capital in India and NAFA, through acquiring stake in Netafim Singapore.
Since acquiring NBFC license from RBI in 2013, NAFA has established its presence in 08 states and disbursed total loans worth Rs. 1000+ crores to 10,000+ customers. Among these, more than 60% of farmers are small farmers & marginal farmers. The company now aspires to expand this network and diversify to allied activities for customers’ long-term credit needs.
While commenting on the development Lauri A. Hanover, CFO, Netafim said, “In the aftermath of Covid, India is gearing up for self-reliance with emphasis on the agri-rural economy and its rapid modernization. While the se ctor is still highly fragmented, the demand for credit in agriculture is largely unmet through for mal financial ins titutions. Being the innovator of drip irrigation and the world le ader in precision irrigation serving customers for more than 57 years across the globe, the equity infusion in NAFA is aligned with our core of supporting custom ers in adopting precision irrigation and automation solutions in agric ulture. This equity infusion will help NAFA strengthen its capital adequacy and further exp and its market presence. We are delighted to partner with The Phoenix Group and Cogito Capital in their maiden investment in India and NAFA.”
Prabhat Chaturvedi, CEO, Netafim Agricultural Financing Agency Pvt. Ltd. elaborated on the company’s plans and said, “Indian agriculture, in general, is characterized by low and uncertain returns as they are more prone to natural calamities and varied risks, res ulting in constant demand for agri-financing support. The advent of inte nsive and climate-resilient agric ultural technologies has further amplified the need for good financing schemes. De spite the presence of multiple fin an cial mediums, there aren’t enough credit products catering to the niche demands of the farmers, leading to a hu ge credit gap. In India, there is a need for diversified credit schemes, al ong with adequate handholding, to pro vide financial guidance to farmers on investing in agriculture and allied activities.
NAFA has been serving this sector efficiently during the past decade, understanding their needs and providing them with the right financial assistance. With this investment, NAFA will further enhance its credit lending por tfolio and expand horizons within the agri-rural domain beyond micro-irrigation. We are bullish about our grow th and are excited to cater to the capital needs of the agriculture and allied sector. The said capital would help us strengthen our market position and reach the communities in a much broader way.”
Guy Zukin – Managing Partner, Cogito Capital said, “Cogito is excited to be teaming up with Netafim (the global irrigation leader and pioneer), and Phoenix Insurance (one of Israel’s leading insurance companies), in providing growth capital to NAFA. We are looking forward to co-operating with our partners in supporting NAFA’s conti nued journey in realizing the potential in the Indian agricultural NBFC market. This investment matches Cogito’s strategy of making investments alongside strong partners, focusing on high growth and adjusted risk opport un ities.”
Ofer Aviran, Head of Direct and Infrastructure Investments of Pho enix Group commented, “We are very proud to partner with Net afim and Cogito in investing in NAFA. Netafim’s prominent pres ence in emerging markets, an d their professionalism in such an important field of agricultural infrastructure development and food prod uct ion constitute fertile ground for continued coope ration for the benefit of all parties. I would like to thank Lauri Hanover, Netafim’s CFO, for without her vision, this complex investment would not have come to fruition”.
About Netafim Agricultural Financing Agency Pvt. Ltd. (NAFA):
Netafim Agricultural Financing Agency Pvt. Ltd. (NAFA) is a non-banking finance company (NBFC) offering var ious customized financial solutions to farmers and various stakeholders in the value chain of Micro Irriga tion. NAFA is a subsidiary of Netafim Ltd, Israel and a sister concern of Netafim Irrigation India Pvt. Ltd. (NIIPL). NA FA’s commercial operations commenced in April 2013 and since then aims to achieve realistic, long-lasting and sustainable results by offering easy access to adequate and timely credit. NAFA has a presence across Maha rashtra, Madhya Pradesh, Chhattisgarh, Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh. The company has disbursed total loans worth Rs. 1000+ crores to 10,000+ customers as of date.
About Netafim Ltd.:
Netafim Ltd., part of the Orbia community of companies, is the world’s largest irrigation company and the global leader in precision irrigation solutions committed to fighting scarcity of food, water, and land, for a sustainable fu ture. With 33 subsidiaries and 17 manufacturing plants worldwide, Netafim offers innovative, tailor-made irri gation and fertigation solutions to millions of farmers from smallholders to large-scale agricultural producers, in over 110 countries.
About the Phoenix Group:
The Phoenix Group is a leader in Israeli multi-line insurance, asset management, and financial services. The gr oup offers a broad set of activities and solutions across businesses and client segments. Managing over $60 bill ion in assets, the Phoenix accesses Israel’s vibrant and innovative economic activity through a robust investment portfolio, creating value for both clients and shareholders.
About Cogito Capital:
Cogito Capital is a US$ 250 millions AUM (Asset Under Management), Israeli debt and equity investment fund, providing capital to companies and ventures, in Israel and abroad. Cogito’s investors include Israel’s leading ins titutional investors.
