The Hindu Business Line : Limagrain buys 51% stake in Avesthagen seed co

Bangalore, Oct.28 Avesthagen Ltd has licensed its field crop technologies to Groupe Limagrain for €10 million (nearly Rs 70 crore) to be paid over two tranches, according to Avesthagen’s top official. In return, the European seeds major acquires 51 per cent stake in Avesthagen’s subsidiary, Atash Seeds, which created the technologies.

Limagrain invested in parent Avesthagen’s research activities some years ago through its arm Vilmorin, and has now taken a controlling stake in Atash, Avesthagen’s Founder and CMD, Dr Villoo Morawalla-Patell, told Business Line. Atash has already bought two seed companies and would look for more acquisitions, she said.

Limagrain/Vilmorin also gains an Indian foothold. The European major is an international cooperative group specialising in crop, vegetable seeds and products such as functional flours.

Dr Morawalla-Patell said the licensing deal was a major revenue booster for the biotech company; the first licence fee had come in and the second would follow next year. It would take Avesthagen’s intellectual property in hybrid, genetically modified and non-GM seeds to Indian and global markets.

$100-M SEED POTENTIAL

Dr Morawalla-Patell said, “The deal with Limagrain makes Avesthagen’s intellectual property reach the average consumer and bring the huge potential market to Indian shores. I believe Atash Seeds will grow in geometric progression.”

Atash, she said, was expected to generate at least $100 million (around Rs 500 crore) a year in five years; for this, it would need to invest $30-40 million (around Rs 200 crore) in the next three years.

Atash, formed in 2006, is based in Hyderabad and will transfer Avesthagen’s technologies in field crops rice, wheat and maize. “Indian seeds will go global. This is the first such international licensing of seeds technologies from India. It’s a very big deal and the ramifications should be seen in the years to come,” Dr Morawalla-Patell said. Avesthagen, she said, has over 100 agricultural patents and a dozen of them are for ‘environment-adjusted crops’ that can withstand drought and salinity.

Avesthagen would also be earning from seed revenues when the European major marketed them globally over the next two or three years, she said. The company, which expects a turnover of Rs 100 crore this year, is planning a new public issue of around Rs 700 crore once the capital market stabilises.

It also wants to complete a couple of similar deals before that, Dr Morawalla-Patell said.

Limagrain will also develop and globally market on an exclusive basis genetically modified maize, wheat, barley, rice and sunflower using Avesthagen’s EAC technologies.

Atash would have a CEO from Limagrain. Dr Morawala-Patell would be the Chairman. The new company would be a strong business model for field crops and contribute significantly to the Indian and global agricultural market, Avesthagen said.

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