Temasek showed that the storm over Olam International had
not deterred it from agriculture investments by buying a stake in an Indian
palm oil-to-poultry group, beating off competition from private equity houses.
Temasek, Singapore's powerful state investment fund, paid 5.72bn
rupees ($104m) for a 19.9% stake in Godrej Agrovet, a subsidiary of the Godrej
The investment comes as Temasek has been dragged into the
furore at Olam, the agricultural commodities trader under attack from short-selling fund Muddy Waters, in part over debt levels.
Temasek has agreed to underwrite an Olam capital raise, of
up to $1.2bn, a measure which could in theory take its stake in the
agricultural trader close to 30%, saying that it was "supportive" of a strategy
of building "more upstream and midstream capabilities and capacities".
"We are pleased to have another opportunity to invest in the
While Temasek does not reveal a full breakdown of its
investments, its Olam stake, currently valued at about $450m, is believed to
represent one of its largest in agriculture.
Rohit Sipahimalani, Temasek's head of India, said the fund
was, with its Agrovet investment, "pleased to have another opportunity to
partner with the Godrej Group", after buying a 4.9% stake in Godrej Consumer
Products earlier this year.
The Agrovet investment was made "in what is an attractive
sector in India", he said.
Indeed, Agrovet has already, four years ago, won investment
from Tyson Group, the US meat giant, with which it formed a poultry joint
venture four years ago.
Temasek is believed to have beaten off competition from
private equity houses including Kohlberg Kravis Roberts and Apollo Global
Management for the 19.9% stake, being sold to raise cash for acquisitions and
Nadir Godrej said that Temasek's "global credentials,
knowledge of agribusiness and excellent track record will be beneficial to
"Godrej Agrovet has been a tremendous source of value
creation for Godrej Industries, and continues to be on a strong revenue and
Indeed, Indian agriculture was "at an inflection point",
which promised a "very bright" future for the business, Mr Godrej said.
Agrovet, besides its poultry tie-up, also runs a palm oil
division, managing more than 45,000 hectares of plantations, and has operations
in feed and in farm inputs, such as fertilizer.
It claims 2,000 employees, 45 manufacturing plans and a
network of more than 10,000 rural distributors.
Other recent investments in India's agriculture sector include,
in dairy, Danone and Fonterra, which are both reported to be bidding for control of Tirumala Milk Products in an effort to expand their operations in the