India: Morgan Stanley PE Asia invests $24m in health foods brand Manna

The corporate logo of financial firm Morgan Stanley is pictured on the company's world headquarters in the Manhattan borough of New York City, January 20, 2015. REUTERS/Mike Segar

A fund managed by Morgan Stanley Private Equity Asia has invested Rs 152 crore ($23.8 million) in Southern Health Foods, operator of natural health food products brand “Manna Foods”.

The Chennai-based company had earlier raised Rs 30 crore from early growth investors led by Fulcrum in 2015.

This latest funding will provide a part exit to the company’s existing investors apart from providing capital for its expansion in South India, according to an official statement

“At a time when India’s eating habits and lifestyles are creating health challenges, we believe that Manna’s natural foods are well positioned to offer appealing choices to consumers. Additionally, foods based on home-grown grains such as millets are regaining popularity, offering ‘superfood’-type nutritional content at an affordable cost. We look forward to driving Manna’s next phase of growth,” said Arjun Saigal, Co-Head of Morgan Stanley Private Equity Asia in India.

Launched in 2000,  Manna Foods offers ready to cook millet-based infant food, millet grains, soya nuggets, dried fruits, purees and pastes. Manna Foods claims to have a network of over 500 distributors that cater to over 60,000 retail outlets across 350 towns in India.

MAPE Advisory Group acted as the sole financial advisor for the transaction.

Morgan Stanley PE Asia specialises in privately negotiated minority investments in companies with substantial business operations in the Asia-Pacific region. It established its India business in 2008 and has invested in a number of companies in the country since then. On Wednesday, the private equity firm also announced that it had led a $36 million funding round in Sahajanand Medical Technologies (SMT), a maker of cardiac stents.

Packaged food companies have attracted investor interest in recent times. In October last year, ready-to-cook food brand Fingerlix raised $7 million from venture capital firm Accel Partners and existing investor Zephyr Peacock, and most recently Veeba Food Services received $6 million in Series C funding led by Verlinvest in the same month. In January last year, it was reported that PremjiInvest had picked 25 per cent stake in Helion-backed iD Fresh Foods.

In 2016, Cremica Food Industries secured $15 million from Rabo Equity Advisors; Maiyas Beverages and Foods got Rs 200 crore ($29 million) from Peepul Capital alongwith existing investors.

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