- Country: India
- Industry: Agriculture
- Stage: Start-up
- Investment size: $250,000 / min. $85,000
- ROI: 41% in 10 years
- Type of investment: Debt, Equity
The startup will bring latest technology into the dairy farm business which will increase the milk production 3 times. Funding is needed to purchase the cattle.
Dairy farming has tremendous growth potential specifically in the state of Gujarat, India due to numerous government incentive schemes, transparent government process approval and support mechanisms in the sector. Gujarat is having the cheapest land bank with plenty of water in rural area from the Narmada canal which is prerequisite for the dairy farming.
Main benefits and growth potential of the Dairy Farming project in Gujarat, India are as follows:
1) In India highly qualified people are still not moving into dairy farming and so the latest technology is not being used. As a qualified chartered account, I can bring latest technology into the dairy farm business which will increase the milk production 3 times.
2) The cheapest land bank and water availability are to be found in Gujarat which will help us to keep the cost of milk production at the lowest levels.
3) Agriculture income is tax free. So tax free income gives more profitability to the business.
4) I am attaching a 30 Holstein Friesian (HF) cows and 100 HF cows project model, which will help to understand the revenue mechanism of the business.
1) There is no competition in the dairy farming sector at all, as all the milk production can be sold to Amul dairy association at beginning level as per the agreed rate.
2) The cost of producing milk is the lowest in Gujarat compared to other parts of the world.
Rationale for the deal
1) There is huge demand of milk and Gujarat is producing 13% of India's milk and exporting to other parts of the world.
2) There is 68% rise in milk price in the recent 5 years and there is an increase @ 15% every year as per the recent report in business line in 2013.
Use of financing
1) Funding can be used to buy the HF cows at the first round of funding.
2) Rs. 25 lakh have already been invested in agriculture for fodder production for the HF cow.
3) Also funding can be used to set up shed and warehouse for the HF cow and fodder.
Opportunity for the investor
1) In the case of debt investment, the loan amount would be minimum Rs. 25-50 lakh. Payback period is 10 years. Effective interest rate would be 12-13%
2) In case of equity investment, 25% share can be offered and same can be discussed further at the time of finalization of deal.
3) Silent investor would be a better option for us and terms and conditions of share distribution can be decided at the time of deal finalization.
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