Caspian Impact Investment Adviser (Caspian Equity) has partnered with the Assam Rural Infrastructure and Agricultural Society (ARIAS) to launch a new investment fund aimed at supporting small and medium-sized enterprises (SMEs) in the agribusiness and allied sectors in Assam, India. The collaboration was formalized through a memorandum of understanding (MoU) between the two parties.
According to a statement released by Caspian Equity on Tuesday, ARIAS will establish and implement the Assam Agribusiness Investment Fund (AAIF), a contributory and determinate investment trust. The fund, with a corpus of Rs 250 crores, will be managed by Caspian Equity. Under the determinate trust structure, the share of beneficiaries is determined during the lifespan of the trust.
AAIF will operate as a Category II Alternative Investment Fund registered with the Securities and Exchange Board of India (SEBI). The World Bank will provide anchor funding for the fund through the Assam Agribusiness and Rural Transformation Project (APART). The primary objective of the fund is to improve agricultural productivity and generate employment opportunities in Assam.
Caspian Equity plans to collaborate with local incubators and accelerators to identify and develop promising SMEs in the region. The company will seek out potential investees with strong credentials, growth prospects, demonstrated sales revenue, a focus on unit economics, and a commitment to strong governance and independent boards. Additionally, Caspian Equity intends to work with agro institutions interested in establishing offices in Assam. The investment fund will allocate capital across various financial instruments such as debt, equity, and convertible equity. Debt investments will have a short to medium-term focus, while equity holdings in portfolio companies are expected to last between seven to eight years.
Toshiaki Ono, Finance Sector Specialist at the World Bank Group, expressed the institution's commitment to supporting the development of the food value chain in Assam. Ono highlighted the crucial role played by agribusiness SMEs in this transformation and emphasized the limited availability of external finance, particularly long-term and patient capital required for their growth.
Akash Deep, State Project Director for ARIAS, emphasized that the partnership and targeted investments will enable farmers and rural entrepreneurs in Assam to adopt sustainable agricultural practices and advanced technologies. The initiative aims to enhance efficiency, reduce environmental impact, and empower local communities in the state.
