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Business EconomyPosted at: Apr 26 2021 7:25PM


Netafim-backed NAFA raises USD 50 mn via Equity and ECB

Hyderabad, Apr 26 (UNI) Netafim Agricultural Financing Agency Pvt Ltd (NAFA), an agri-focused non-banking finance company (NBFC) and a subsidiary of Netafim, Singapore, on Monday announced it 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, NAFA, a global-based out of Israel, said in a release here.
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 and 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 a stake in Netafim Singapore.
NAFA’s commercial operations commenced in April 2013 and have a presence across Maharashtra, 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. Among these, more than 60 per cent of farmers are small farmers and 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, this equity infusion will help NAFA strengthen its capital adequacy and further expand 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, NAFA while elaborating on the company’s plans, said, despite the presence of multiple financial mediums, there aren’t enough credit products catering to the niche demands of the farmers, leading to a huge credit gap. In India, there is a need for diversified credit schemes, along with adequate handholding, to provide financial guidance to farmers on investing in agriculture and allied activities.
With this investment, NAFA will further enhance its credit lending portfolio and expand horizons within the agri-rural domain beyond micro-irrigation. We are bullish about our growth 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, Prabhat added.
Guy Zukin – Managing Partner, Cogito Capital said, we are looking forward to cooperating with our partners in supporting NAFA’s continued 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 opportunities.
Ofer Aviran, Head of Direct and Infrastructure Investments of Phoenix Group commented, "We are very proud to partner with Netafim and Cogito in investing in NAFA. Netafim's prominent presence in emerging markets and their professionalism in such an important field of agricultural infrastructure development and food production constitute fertile ground for continued cooperation for the benefit of all parties.
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