By Swaraj Baggonkar
Mahindra Agri Solutions, a subsidiary of Mahindra & Mahindra (M&M) sold its entire stake in Merakisan, a Pune-based agri start-up, back to its founder for just Rs 1. Founded in 2014 by Prashanth Patil, Merakisan supplies fresh fruits and vegetables sourced directly from the farmers.
Mahindra Agri Solutions (MASL) has concluded the sale of 91.59% stake of Merakisan (MKPL), M&M said in a notification sent to the stock exchanges on September 8. The Mahindra group company had initially invested an undisclosed sum for a 33% stake in the start-up in 2016 before it increased its holding in the ensuing period.
While M&M has been known to have invested in several startups over the past several years, examples of the company selling its holding back to the target company’s founder are sparse, especially if the transaction value is just Rs 1.
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“MASL has decided to exit this business by selling its entire stake in MKPL to the founder and promoter of MKPL i.e. Mr. Prashant Patil. The net worth of MKPL is negative and hence the consideration for sale of stake is arrived at a nominal value as agreed between the parties,” M&M stated.
The standalone revenue from operations of MKPL for FY22 was Rs 4.18 crore while its standalone net worth stood at negative Rs 0.33 crore. Patil has 7.95% equity in Merakisan.
“The major reason that we got involved with M&M was because they believed in bringing prosperity to the agriculture industry through our project. That objective did not happen. M&M only mentioned that the decision to exit the business was a strategic decision,” said Prashant Patil, Founder, Whole time director & CEO, MKPL.
Patil further added that the exit by M&M will not change the way Merakisan is operated and also that the company would look to get on board new investors. MKPL has been approached by a few new companies.
“I would personally be driving Merakisan now. The main objective of coming back to India was for farm prosperity. We are predominantly into the organic products sector which will continue,” Patil added.
MKPL sells organic groceries like rice, pulses, wheat and lentils and organic oils in 14 cities, including Pune, Mumbai, Hyderabad, Chandigarh.
“We have been contacted by a few interested parties but we have not finalised anything yet. Mahindra was the funding partner to us. The core idea of the organisation is not for profitability but it is about helping farmers in market linkages,” Patil added.