Good opportunity for the investor to earn at least USD 8 million in 5 years time by creating a great basmati rice brand with an all India network of retail outlets.
The company will primarily be marketing Basmati Rice in their own brand name, covering in phases all India by year 2017. The company has good contacts in modern trade and wholesale trade, making the marketing of Basmati Rice a bit easy.
The intent of the company will be to reach Rs. 100 crores sales (approx. USD 16 million) by year 2019, 5 years from now. The company will recruit sales professionals from across FMCG to make this happen. Rice will be packed at a reliable 3rd party-manufacturing site in North India.
Rice is such a market wherein opportunity is buying at the right time (new peak season) and then selling throughout the year. In 3 years, company expects to be all India covering over 50 top cities in India
Once brand reaches USD 16 million in sales, promoter’s intent to sell equity for a premium to suitable buyers. Valuation will at least be 1.5X
Although there are many Basmati brands in the market, due to the good trade relationships, the promoters will be able to place products in most of the retail counters.
On-going sales promotion will help sell the product off the shelf. Rice will be of good quality, no compromise and knowing the tricks of the Basmati trade, extra profits will be booked during certain periods in the year wherein bulk buying and booking will be lucrative.
Good promoters, good pricing, attractive packaging, good placement, good product, good sales strategy and right timing will ensure product will be successful in the market.
Seed capital will be used for working capital, retail network expansion and sales promotion
The investor has an opportunity to reap benefits when equity will be sold at a premium at the end of year 5, 2019. Valuation may be at 1.5X. Assured returns at the end of 5 years - 50% to investor and 50% to promoters.