fresh buy. The deal is considered unique, given the chain’s focus on vegetables and fruits Bijoy Ghosh BIJOY GHOSH
PE firm takes a big bite of vegetable and fruit retail
WestBridge Capital picks an undisclosed stake in Coimbatore’s KPN Farm Fresh for ₹600 cr
Software, data analytics and fintech are some of the hot sectors that attract private equity (PE) firms. But, the Coimbatore-based KPN Farm Fresh, which sells fruits & vegetables and grocery, has managed to attract PE funding from WestBridge Capital which has picked up an undisclosed stake in KPN Farm Fresh, which runs Kovai Pazhamudir Nilayam (KPN) retail outlets, for ₹600 crore. KPN Farm Fresh retails fruits and vegetables and is a household name in Tamil Nadu.
Sources said that the WestBridge Capital investment in KPN Farm Fresh is only for its outlets in and around Chennai. The KPN outlets in Coimbatore, Tiruppur, Tiruchi and Thanjavur will be with the promoters, who will continue to hold 40 per cent stake in KPN Farm Fresh, which has been valued at ₹900 crore.
WestBridge’s website has KPN as one of the portfolio companies having raised funds in Series A. It is learnt that WestBridge has picked up the stake in an all-cash-deal.
Humble beginning
The first retail outlet of Pazhamudir Nilayam was started in Coimbatore in 1965 by four brothers — Chinnaswamy, Natarajan, Kandaswamy, and Rathinam. They began expanding to other cities in the 1990s individually. Natarajan expanded to Chennai with partnerships and brought the stores under his management under the Kovai Pazhamudir Nilayam brand, say the sources.
Commenting on the deal, Sathyanarayanan Ramachandran, Sundram Fasteners Associate Professor of Marketing at IFMR GSB – Krea University, said this is a significant development for a brand grown and nurtured in Tamil Nadu and a sector like food and vegetable retail.
Value proposition
In an air-conditioned retail ambience, KPN gave customers a strong value proposition of fresh and quality fruits and vegetables (with dairy and other groceries over time).
Arun Natarajan, Founder of the Chennai-based Venture Intelligence, said from an industry’s point of view, there have been PE buyouts in the supermarket segment even earlier — for example Nilgiri’s (2006) and More (2020). However, the Kovai Pazhamudir deal is unique given the chain’s key focus on vegetables and fruits.
For WestBridge, which has thus far been focused mainly on minority investments in tech and tech-enabled businesses, this deal is unique as well.