Based on sources, private equity firm WestBridge Capital picked up a majority of the stakes in Tamil Nadu-based fruits and vegetable retailer Kovai Pazhamudhir Nilayam, KPN Farm Fresh as it seeks to increase its stake in India’s retail and consuming markets.
Kovai Pazhamudhir Nilayam is one of Tamil Nadu’s most well-known for fruits and vegetable retailer . The story of its growth from a single pushcart in Coimbatore to a thriving business still owned by the same family is one of persistence and entrepreneurial legend.
Potential Expansion Plans and Future Operations
According to Moneycontrol, the deal values KPN at Rs 800 crore, with WestBridge picking up a nearly 70% interest for Rs 550–600 crore in an all-cash purchase. Senthil Natarajan, the present Managing Director, will keep running the operations while the promoters will retain control over the other 30%.
According to reports, the chain has 400 crore rupees in revenue and is profitable. While it presently has stores across Tamil Nadu, it also plans to expand in other southern states. The deal was reached a few weeks ago.
Veda Corporate advisors were reportedly the transaction’s advisors, according to a market source. WestBridge and Veda did not respond to queries, and Senthil Natarajan, the MD of KPN, stated that he had no more to add.
KPN’s story began in Coimbatore in the 1960s when Senthil’s father R Natarajan, the second of four brothers, left school to work alongside his older brother selling fruit to support their family after their father, their only form of income, passed away.
In 1965, the two brothers invested Rs 300 to build their first store using their savings. ‘Pazhamudhir Nilayam’ was the name of the store. It was a pioneer in the concept of fair, set prices, and sold items by the weight instead of the dozen.
When they noticed a decline in sales, the two brothers first sold fruit juice as well. Although the juice was only pulp with no additional water, it was able to attract customers who finally buy fruits, the two brothers were profiled in a report by The News Minute.
According to various media accounts, they formally established KPN Farm Fresh in 2012 with a 60 percent stake in the company; the balance of forty percent was divided among partners in existing KPN outlets.
According to an article in The Weekend Leader, the company has two warehouses: one of 20,000 square feet is in Coimbatore, and the other is 1.5 lakh square feet and is located in Vanagaram, the outskirts of Chennai.
The decision by private equity firm WestBridge Capital to acquire the majority of KPN Farm Fresh comes as the country’s most active startup investor has slowed down the deployment of capital due to the poor macroeconomic climate. The PE has only taken part in one deal so far this year, compared to 25 investments in 2022.
However, the private equity firm’s portfolio includes a few consumer technology new companies, such as VnF and Fraazo, that operate in the food and beverage space. WestBridge is said to be close to investing in Milky Mist, one of the largest manufacturers of dairy products.
