M&M Buys Out VC Firm Omnivore's Stake To Acquire Agri-tech Firm MITRA

Keeping in line with its strategy to grow its revenues from the farm machinery segment 10 fold within the next five years, Mahindra and Mahindra (M&M) acquired agro-equipment maker MITRA Agro Equipments after buying out venture capital firm Omnivore’s stake in the company.

M&M Farm Equipment Sector on Monday signed definitive documents to raise its shareholding in MITRA Agro Equipment from the existing 47.33 per cent to 100 per cent, making it a wholly-owned subsidiary of M&M. As part of the deal, M&M fully bought out Omnivore’s stake in the business. The deal size was not disclosed.

Last February, M&M had raised its shareholding in MITRA to 47.33 per cent from 39 per cent earlier. This marks agri-tech fund Omnivore’s second exit in a little over six months. In August 2022, Omnivore exited aquatech startup Eruvaka by selling its stakes to Netherlands-based Nutreco.

Founded in 2012 by Devneet Bajaj, MITRA is the Indian market leader in high-precision orchard sprayers. It targets farmers who grow fruits like grapes, pomegranate and oranges. The firm has more than tripled its revenue from FY18 to FY22 and employs over 200 people and has started exporting its products. Post-acquisition by Mahindra, MITRA plans to accelerate the expansion of its product portfolio alongside its network in India and overseas markets.

Dev Bajaj, Founder of MITRA, said, “After eleven years of building a passionate team, more than ten innovative products, and a radical rural sales strategy, the journey of exiting MITRA to M&M is gratifying.” Bajaj is now the Chief Strategy Officer of Dream Sports and heads one of India’s largest CVC funds, DreamCapital.

Hemant Sikka, President of the Farm Equipment Sector, M&M, said, “Mahindra aims to grow its farm machinery business by 10-times in 5 years and is making rapid progress towards achieving this goal. The additional share purchase in MITRA would aid Mahindra’s growth and expansion into the growing horticulture market.”

Meanwhile, Mark Kahn, managing partner, Omnivore said through M&M’s expansive dealer network, MITRA’s technology will now be accessible to horticulturists across India. Omnivore was the first institutional investor in MITRA.

M&M’s farm segment posted its highest ever Q3 volumes at 104,900 units, up 14 per cent YoY.

Rajesh Jejurikar, Executive Director, M&M had said during the earnings meet that M&M has garnered a market share of 41 per cent in the farm sector, and ranked No. 1 by value market share in SUVs at 20.6 per cent. “We believe the farm machinery segment will be our strong growth story,” Jejurikar had said.

He explained that globally, the farm machinery segment is much larger than the tractors segment, but in India it is the other way round. As of FY22, if tractors were a $60 billion market, farm machinery was a $100 billion market. In comparison, in India tractors are a Rs 47,000 crore market versus a Rs 9,300 crore market for farm machinery. “This poses a huge opportunity for us in the next five-odd years. We will target 10 times more revenues from farm machinery that will also include revenues from exports,” he added.

Year till date, M&M's farm machinery segment has grown 40 per cent.

The company plans to launch 15 new products in the segment now that it has in-house manufacturing of farm machines at Pithampur, Madhya Pradesh apart from rapid channel expansion and focus on exports.

“Going forward, we will continue to launch new farm machinery products in the country with help from our COEs in Turkey, Finland and Japan (where, over the years, we have created footprints through strategic stakes and acquisitions). We are also setting up a dedicated new plant at Pithampur to produce rice transplanters, potato planters and harvesters,” M&M has noted in its 2022-23 annual report.