Rallis India, a subsidiary of Tata Chemicals, on Thursday announced the acquisition of a majority stake of 53.5 per cent in Bangalore-based Metahelix Life Sciences, a seeds research company in an all-cash deal of Rs.99.50 crore. The acquisition has been funded through internal accruals.
Rallis will subscribe to an additional equity of Rs.25 crore to increase its stake in Metahelix to 59.02 per cent on a fully diluted basis and will enhance its shareholding to 100 per cent in Metahelix over five years.
Addressing the media, V. Shankar, Managing Director & CEO, Rallis India, said, “This acquisition aims at predominantly driving the agricultural productivity and yield enhancement. We believe that seeds is a high growth area that is value creating. Seeds will become an increasingly larger proportion of our portfolio going forward.” Metahelix was promoted by five scientists and over the last three years, it has started marketing hybrids under the brand ‘Dhaanya' seeds. It is the first Indian company that has its own proprietary Bt trait, ‘cry1C' approved in cotton and has research facilities in Bangalore, Hyderabad and Ahmedabad and several testing locations all over India. It has a good portfolio in rice, maize, millets and vegetable seeds along with good germplasm and several products in the pipeline.
According to Mr. Shankar, Metahelix has 120-strong field force and around 1,000 distributors. “The company's gross margins are healthy and in the current year, its expected revenues are Rs.60-65 crore. It is currently in the investment phase and will become profitable in the next 1-2 years.”