Fairfax India set to acquire controlling stake in NCML

Mumbai: Fairfax India Holdings Corporation, a fund set up by Canadian investor Prem Watsa, is set to acquire controlling stake in private sector collateral management and weather advisory firm National Collateral Management Services (NCML). 

The deal size could be around $150-180 million and is likely to be announced in the next few days. 

Fairfax India, which raised $1 billion in January, recently announced the acquisition of additional 26% stake in Nirmal Jain-controlled financial services major IndiaInfoline. 

Fairfax India spokesperson refused to comment. Sanjay Kaul, MD, NCML also declined to comment. 

NCML has warehouse capacity of around 1.1 million tonne. The company is also a large player in weather services, and has around 3,300 weather stations to provide weather-related data to companies providing crop insurance and government entities.

Some of NCML's investors including Indian Farmers Fertiliser Cooperative Limited, Rabo Equity Advisors and International Finance Corporation are said to be selling their combined stake of nearly 70% for an estimated Rs 1,000 crore. Two sources familiar with the development said Fairfax is set to buy this stake. 

NCML in addition will also issue fresh equity to Fairfax India, which will take it's proposed holding to more than 70%. NCML's valuation post the stake buy is also likely to cross $200 million. 

Warehouse and collateral management space has huge growth potential, with companies like Staragri and Edelweiss Commodities fast expanding in the field. 

Other shareholders in NCML are Karur Vysya Bank, HAFED, NCDEX, Punjab National Bank, Corporation Bank, Bank of India, Canara Bank, HDFC Bank, ACE Geneva, Indian Bank and YES Bank.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.