M&M Takes Stake in VC Firm Omnivore to Buy Agtech Firm MITRA

Picture Source: Internet

Mahindra and Mahindra (M&M) has acquired agricultural equipment maker MITRA Agro Equipments after acquiring a stake in venture capital firm Omnivore as it pursues its strategy to grow the revenue of the agricultural machinery segment tenfold over the next five years.

M&M Farm Equipment Sector signed final documents on Monday to increase its stake in MITRA Agro Equipment to 100% from the existing 47.33%, making it a wholly-owned subsidiary of M&M. As part of the transaction, M&M fully acquired Omnivore’s stake in the business. The size of the deal was not disclosed.

In February last year, M&M raised its stake in MITRA to 47.33% from 39% earlier. This marks the second exit for the agtech fund Omnivore in a little over six months. In August 2022, Omnivore sold its stake to Netherlands-based Nutreco, exiting aquatech startup Eruvaka.

Founded in 2012 by Devneet Bajaj, MITRA is the market leader in high-precision orchard sprayers in India. It targets farmers who grow fruits such as grapes, pomegranates and oranges. The company more than tripled its revenue from FY18 to FY22, has more than 200 employees and has started exporting its products. After being acquired by Mahindra, MITRA plans to expand its product portfolio and network in India and overseas markets.

“The journey from MITRA to M&M has been gratifying after 11 years of building a passionate team, more than a dozen innovative products, and an aggressive rural sales strategy,” said Dev Bajaj, Founder of MITRA. Bajaj is now the Chief Strategy Officer of Dream Sports And leads DreamCapital, one of the largest CVC funds in India.

Meanwhile, Omnivore managing partner Mark Kahn said MITRA’s technology is now available to gardeners across India through M&M’s vast dealer network. Omnivore is MITRA’s first institutional investor.

M&M’s farm division sold an all-time high of 104,900 units in the third quarter, up 14% from a year earlier.
M&M executive director Rajesh Jejurikar told the earnings to call that M&M has a 41% market share in the agricultural segment and is number one in value market share for SUVs at 20.6%. “We believe the agricultural machinery segment will be our strong growth driver,” Jejurikar had said.

Globally, the agricultural machinery segment is much bigger than the tractor segment, but in India, the opposite is true, he explained. If tractors are a $60 billion market as of FY22, farm machinery is a $100 billion market. In India, by comparison, the market size for tractors is Rs 47,000 crore, while that for agricultural machinery is Rs 9,300 crore. “This presents a huge opportunity for us in the next five years. We aim to increase farm machinery revenue by 10 times, including export revenue,” he added.

Year-to-date, M&M’s farm machinery segment is up 40%. The company plans to launch 15 new products in this segment as it manufactures agricultural machinery in-house in Pithampur, Madhya Pradesh, apart from rapid channel expansion and focus on exports.

“Going forward, we will continue to launch new agricultural machinery products in the country with the help of our COEs in Turkey, Finland and Japan (where we have established our footprint through strategic stakes and acquisitions over the years). We are also in Pithampur A dedicated new factory has been set up to produce rice transplanters, potato planters and harvesters,” M&M said in its 2022-23 annual report.

Get Daily Prediction & Stocks Tips On Your Mobile