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Engineer founders of agri-asset management company, Hosachiguru, reap golden harvest

Sharanya Chandrakantha Rao Inna
23rd Mar 2015
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When Yourstory had covered Hosachiguru in 2014, the agri-asset management company was interested solely in acquiring and developing parcels of land into flourishing farms. Since then, it has diversified, and now, it operates with two well-defined and established verticals. It continues to disrupt the agriculture space.

hosachiguru

Currently, it owns and manages agricultural assets worth over USD 7 million in horticulture, timberland, protected cultivation and nursery operations.

Hosachiguru started with identifying arable parcels of land and enabled various investors to invest in these pieces of land. The company is responsible for the design of farms, procuring saplings and monitoring the overall operations of the farm. The firm works towards promoting “green” ROI via structured investment plans in commercial farming and practices “precision farming.” Hosachiguru’s gains come from the final harvest.

Thus, the investor is given a certain guarantee from the company – Hosachiguru receives a profit only if the investor earns, too. Investors benefit from the company’s systematic portfolio management, transparent investment structure, deep expertise in precision farming and commitment to achieving environmental and community sustainability. Customers enjoy a substantial passive tax-free income of 15-20 per cent per annum returns on average. In fact, all returns from Hosachiguru to its customers are tax-free.

hosachiguru
Figure: Hosachiguru – 5 step process

Evolution

The company has identified a new business opportunity. Besides sourcing and managing arable lands for investors, they are now focusing on farm operations and management contracts. The team realised that the entire process of locating suitable land was slowing them down in terms of growth. Through research and conversations with various stakeholders across the agri-business sector, they found out that there were a number of individuals who already owned land, but lacked the time or energy to supervise the development of crops in their respective areas.

With 100 per cent% FDI being allowed in protected cultivation, Hosachiguru has already received an offer of one million Euros for the development and management of state-of-the-art poly-houses, which have been set up near Hindupur, Andhra Pradesh.

Hosachiguru aims to conduct end-to-end operational management for the second and third generation owners of arable land, and is taking a percentage of the returns by selling produce. They intend to focus on crops with attractive demand, high value and short cycles such as papaya, banana, melon and ginger.

Their model of operation is as shown below: -

hosachiguru
Figure: Hosachigururu – Process Flow

Then and Now

The company’s first project involved managing 50 acres of land. Ashok J. (Co-Founder & Chairman) says that currently Hosachiguru manages about 400 acres of land and has already received LOI for more than 500 acres of land, which they will add to their portfolio in the coming financial year. Their second business vertical has also matured and now agri-operations management comprises 75 per cent% of Hosachiguru’s portfolio while the rest is occupied by agri-business investment. Hosachiguru also facilitates capacity building by providing training and teaching technology modules to its farmers.

Hosachiguru aims to build a strong supply chain to market its produce to the organised retail space by investing in a packing, grading and a cold storage unit. The fragmented market is unable to supply to such stores and gain from market rates because they cannot guarantee a regular flow of produce from small patches of land.

Hence, they have to resort to selling their harvests at the local mandi and, in the process, forego higher profits that could come from supplying to retail chains.

 

Bringing agriculture to the big data era

Technology has played an important role in Hosachiguru’s rapid growth. Sriram C. (Co-Founder & Director- Farming Operations) mentioned that investors receive a login ID and password that they use to access reports and financial statements tracking the progress and health of their investments. Supervisors of the farms also input data regarding the amount of fertilizers added, status of the farm, temperature conditions and other parameters that help investors and Hosachiguru access real-time data through an internal application. The entire decision making process is now catalysed by instantaneous flow of information.

Sowing seeds of opportunity

Srinath S. (Director, Sales and Customer Support) believes that strengthening the two verticals will help Hosachiguru scale new heights and transform Indian agri-service sector. Hosachiguru can be engaged for crop protection services, integrating technology into farming and other multiple functions related to agriculture. The agri-services market in India is yet to mature. However, companies such as Agricultural Asset Management, Los Grobo , Westchester, Duxton Asset Management and Macquarie are already offering such services across the world.

hosachiguru
Left to Right: Hemanth P., Ashok J., Srinath S., Sriram C.

He also mentions that the company is going to start building Hosachiguru as a brand that supplies fresh produce through B2B channels. That way, Hosachiguru’s investors and farmers can reap the benefits of their long-term investment and effort and ensure consistent and high returns.

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