Karuturi Global is raising Rs.75 Cr from IL&FS Investment Managers Ltd (IIML) through its PE fund - Tara India Fund III.

Karuturi's board has apporoved the allotment of around 36.39 Mn shares for Rs 20.61 each to IIFL.

The funds is being raised to finance expansion of its agriculture export business from its Ethiopia land.

In March, it had planned to raise $150 mn through FCCBs and Debt equally. DealCurry

Transaction Reference: RTT News

Karuturi Global is in the business of exporting roses and 95% of its revenues are contributed through this business. Each stem is sold in the range of 11-12 Euro cents,while its cost of production is around 7 Euro cents keeping a margin of around 60% on each rose stem. It produces around 555 million stems of cut roses p.a.

It exports its products to developed countries like the US, Europe, Japan, Russia and Australia whereas its operations are spread in some of the low-cost countries like Kenya, Ethiopia and India.

It recently bought 311,700 hectares of land on lease in Ethiopia to start agricultural cultivation in a phased manner. In the first phase, 60,000 hectares of land will begin production starting in 2010-11. The company plans to grow cereals, sugar and palm.

The African business of Karuturi Overseas includes all the floriculture business in Kenya and Ethiopia and along with this it also includes its foray into agriculture products in Ethiopia. The products include palm oil, sugarcane, fresh-cut vegetables and cereal crops.

Karuturi became the world’s largest grower of roses after acquiring Ethiopia’s Sher Agencies for $68 mn last fiscal. The acquisition took its yearly production from 150 mn stems to 685 mn stems.

In 2007, Karuturi Global acquired 100% stake in Delhi's Estel Communications which is an ISP.

It plans to increase cultivation to 1,20,000 hectares in the next five years, which is three times the size of Mumbai having 44,000 hectares of land.

Hedge fund Monsoon Capital picked up 3.8% stake in Karuturi last month by converting warrants.

It has also been planning funding for its Dubai-based subsidiary, Karuturi Overseas Limited, the holding company for all of its African business.

In 2007, the company had raised $75mn through FCCBs in 2 tranches of $25mn and $50mn to investors like Goldman Sachs, Credit Suisse, Morgan Stanley.

According to commerce ministry data, flower exports went up to Rs 65.63cr during April-February 2008-09 compared with Rs 48.75cr in the previous fiscal. The government has identified floriculture as a 'sunrise' industry and accorded it a 100% export oriented status.

More than 50% of around 300 floriculture units are based in Karnataka, Andhra Pradesh, Tamil Nadu. West Bengal, Maharashtra and Rajasthan also have large areas under floriculture.

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