India Agribusiness Fund invests Rs 75 crore in Beloorbayir Biotech

Bangalore: Private equity fund India Agribusiness Fund is investing Rs 75 crore in Bangalore-based Beloorbayir Biotech, which supplies key ingredients to global nutraceutical, food, beverage and pharmaceutical makers.

Beloorbayir will use the funds to scale up its production capacity, research and development and hire talent.

"We are going in a big way to expand research and development, capacity and presence in foreign markets," said BG Bairy, managing director of Beloorbayir. "We will also open a facility in the United States for brand building and research and development."

Beloorbayir makes and markets several ingredients which have various health and medicinal benefits.

These are used in nutraceuticals, dietary supplements and drugs to treat conditions such as heart disease, high blood pressure, arthritis, obesity, diabetes and depression.

For instance Beloorbayir is the largest manufacturer of glucosamine in India which is most often used as a supplement to ease the joint pain caused by arthritis.

Beloorbayir which crossed sales of Rs 85 crore for the fiscal 2013-2014, gets a major portion of its revenue from markets such as the United States, Europe, Japan, Asia Pacific and the SAARC region.

"We think nutraceuticals is high growth, high potential sector and yet not developed in India. We are waiting for this to bloom," said Rajesh Srivastava, chairman of Rabo Equity Advisors, who manages India Agribusiness Fund - sponsored by Dutch financial services provider Rabobank.

Both Srivastava and Bairy declined to reveal the valuation of Beloorbayir after this round of funding.

The global nutraceuticals product market reached $142.1 billion (Rs 8.5 lakh crore) in 2011 and is expected to reach $204.8 billion (Rs 12.2 lakh crore) by 2017, growing at a CAGR of 6.3 percent, according to research firm Transparency Market Research.

Asia-Pacific, including Japan, is expected to have the second largest market share after North America by 2017.

"This funding will give a great spurt to the company to execute the good order book position that they have," said EVPS Krishna, chairman of Citadel Management Consulting, which was the financial advisor for this deal. "Rajesh Srivastava joining the board will really flip the company."

The Indian nutraceuticals market which mainly includes dietary supplements, functional food and beverages is poised to grow fivefold at the end of the current decade, according to IKON Marketing Consultants.

It is growing at a healthy double digit CAGR of 18.46 percent and is currently worth around Rs 19,500 crore.

"These food and drink products are growing faster in India compared to overseas markets," said Srivastava of Rabo Equity Advisors.

Experts say the growth of the nutraceuticals market in India is largely because of the increased affluence, life style diseases and change in the consumer perception and rising healthcare costs.

Bairy of Beloorbayir is a classic tale of rags-to-riches. Born in an orthodox family, he did his schooling in Beloor village and graduation in temple town of Udupi, Karnataka. After completing masters in organic Chemistry from Mysore University, Bairy launched Beloorbayir in 1981.

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