SLCM anticipates double AUM at INR 11,500cr in FY23: CEO Sandeep Sabharwal

DELHI, 19 September 2022: Agri logistics post-harvest company Sohan Lal Commodity Management Pvt Ltd (SLCM) anticipates doubling its assets under control to Rs 11,500 crore during the current fiscal year, stated a senior company official.

The company's assets under management (AUM) increased by almost 100% during the previous three years, reaching INR 5,517.17 crore in 2021–22.

The AUM was INR 2,481 crore in 2020–21 compared to INR 1,197.6 crore the year before.

Our AUM goal for this year is Rs 11,500 crore. According to Sandeep Sabharwal, Group CEO of SLCM, we are expanding at a 100% rate.

“We are a post-harvest agricultural logistics firm that handles the entire agri supply chain, from farmer output levels to levels of ultimate consumer consumption. We buy from farmers, move it, store it, and finance agriculture using a variety of tools that are designed for farmers, millers, traders, and brokers (arthiyas),” Sandeep added.

The company owns Kissandhan Agri Financial Services Pvt Ltd, a completely owned non-banking financial corporation (NBFC), in the agri financing sector.

Kissandhan provides loans to Farmers Produce Organizations (FPOs), retail loans to farmers through a business correspondent model (BC), funding Microfinance Lenders (MFIs) in rural regions, and financing against storage receipts/warehouse receipt of agricultural commodities.

Loans to FPOs and retail farmer borrowers through BCs fall under the category of unsecured loans, while loans secured by warehouse receipts (WRs), which are distributed against the commodities parked in company-managed warehouses, are fully secured.

According to Sabharwal, SLCM manages the complete value chain in the agri-commodities sector, acts as a commission agent to purchase farm products, and has no part to play in the selling of those commodities.

"The company currently oversees 9,483 warehouses that are dispersed throughout practically all of India's states. Our daily management of items valued at roughly INR 7,000 crore is the point at which our numbers begin to have an influence on the agri financing industry,” Sabharwal added.

He explained the two aspects of the finance business concept. One is the area where SLCM provides services to financial organisations like SBI, HDFC Bank, Axis Bank, and Yes Bank, to name a few.

"Our banks will give them the financing based on our warehouse receipts where the commodities are parked by the farmers/brokers. Each day, such industry generates roughly INR 4,500 crore. It is a significant market for us.” According to him, these are usually major players with an average ticket value between INR 50 and INR 70 lakh. He mentioned that the business' NBFC subsidiary, Kissandhan, has additional items available.

It provides loans to MFIs, FPOs, agri traders, arhtiyas, commodity based finance to farmers, small and marginal farmers through BCs, and agri traders. Kissandhan has spent INR 2,486 billion as of 31 August 2022, for the current fiscal year.

The SLCM operates in Myanmar as well, specialising in the administration of collateral and the warehousing of commodities. Through its subsidiary, North End Foods Marketing Pvt Ltd, it also engages in procurement.

When asked about the company's plans for raising money, Sabharwal replied that although it has ample cash, it still intends to raise roughly INR 300 crore by December to support commercial expansion.

The organisation offers loans with terms ranging from 6 to 12 months and interest rates between 11.5 and 18 percent. 2,471 million metric tonnes are handled by a network of 9,483 warehouses under the management of SLCM Group. Its portfolio contains 1,090 different commodities. According to the official, the corporation has affected up to 22.8 crore lives and over 4.5 crore people's means of subsistence.