Hyderabad: City-based startup Our Food, which helps rural youth set up small mills, said it is looking to raise about $ 10 million (about Rs 70 crore) in about nine months through debt. This will be used for lending the NBFC that it wants to start. It has already applied for a NBFC licence, said Our Food founder V Bala Reddy.
This proposed NBFC will lend to those willing to set up the processing centres. Typically, each will need an investment of Rs 5 lakh for the machinery, shed and working capital. Out of this, Rs 4 lakh will be provided on loan at 11-12 per cent interest, depending on the credit risk of the franchises. The remaining Rs one lakh has to be contributed by the franchises. The loan tenure will be four to five years, he said.
Now, it has 70 such units including 50 in Telangana. It has plans to increase the number to 400 units by May this year, he said. Each of the unit is now handling about five tonne and clocking revenues of around Rs three lakh a month, taking the total turnover to Rs 1.5 crore a month and volume to about 250 tonne a month now. Each unit is providing employment to about four people.
“We will make farmers as franchises. This will ensure that farmers get about 20 per cent more revenues as they do the processing themselves,” he said.
Reddy also said that the company has recently closed a $ three million (about Rs 20 crore) equity capital fund raise deal from a domestic investor. “We will get that money in two to three months and that will be used for our expansion. Among others, we have plans to make the equipment required by the franchises. Now, we are getting them from fabricators. The equipment making unit will be come up at Zaheerabad,” he said.