Private equity firm WestBridge Capital has acquired a majority stake in Tamil Nadu-based fruits and vegetable retail chain KPN Farm Fresh, according to sources. This move is part of WestBridge's strategy to focus on India's consumption and retail sector. KPN, also known as Kovai Pazhamudhir Nilayam, is a well-known retail chain in Tamil Nadu that started as a single pushcart in Coimbatore and has now become a successful family-run business.
The deal values KPN at Rs 800 crore, with WestBridge purchasing a nearly 70 percent stake in an all-cash deal worth around Rs 550-600 crore. The remaining 30 percent will remain with the promoters, and Senthil Natarajan, the current Managing Director, will continue to run the operations. KPN Farm Fresh, which currently has stores across Tamil Nadu, plans to expand into other southern states as well.
The market source revealed that Veda Corporate Advisors were the advisors for this transaction. However, both WestBridge and Veda did not respond to queries. Senthil Natarajan, the MD of KPN, declined to comment on the deal. The chain reportedly has revenues of Rs 400 crore and is profitable. The acquisition was finalized a few weeks ago.
KPN's journey began in the 1960s when Senthil's father R Natarajan, along with his older brother, started selling fruits to support their family after the death of their father, who was the sole breadwinner. They opened their first store in 1965 with an investment of Rs 300, pioneering the concept of fair, fixed prices and selling items by weight. The brothers also started selling fruit juice, which eventually attracted customers to buy fruits.
In 2012, KPN Farm Fresh was formally established with a 60 percent stake held by the company, while the remaining stake was distributed among partners in existing KPN outlets. The company has warehouses in Coimbatore and Chennai.
WestBridge Capital's decision to acquire a majority stake in KPN Farm Fresh comes at a time when the private equity firm has slowed down its investments due to the challenging macroeconomic environment. However, the firm already has consumer technology companies in the food and beverages sector in its portfolio. It is also reportedly close to investing in Milky Mist, a major dairy product manufacturer.