A tree that grows money? Does that really exist in today’s time? Or is it just a figment of imagination? Well, maybe not the tree, but there is a startup that can help your money grow.
Growpital, is an alternative investment platform that helps you invest in agri-projects and provides great returns. Growpital provides tax-free assured returns in quarterly payouts. So imagine yourself, like a passive farmer – one that grows money.
I had done a preliminary review of Growpital when it was launched. Recently the platform launched its NCD on Tyke which is offering up to 19% IRR. In this review, we will cover the progress made by the platform and our experience using it.
Growpital Business Model
Growpital has set up a process of curating farmlands and a research-based system for selecting the best horticultural crops. We can use the analogy of a mutual fund, in which instead of different stocks, a portfolio of crops that have low correlation with each other is grown. Growing crops is just part of the business model, the second part is creating a strong network of partners who has stable demand for these crops.
A deep understanding of the complete ecosystem and cycle allows the platform to receive profits and therefore enables them to pass those on to investors. As it is common knowledge agriculture becomes more profitable with larger-scale operations due to economy of scale hence the returns they provide to investors are also a function of the invested amount. For investors who are able to allocate larger funds, 18%+ IRR is provided.
One of the biggest benefits of Growpital investment is that all cash flow is tax exempted if invested through the LLP structure as it comes under agricultural income.
Growpital Business Performance
Growpital has grown fast in the last 9 months. With more than 1000 users, investments worth 6.4 crores and a total farm portfolio of 1000+ acres the brand has ambitious plans. While the current revenue stands at approx 13 crores, they intend to reach a whopping 600 crores in just 3 years’ time.
Growpital grows 60+ crops like Honey, Jeera, Banana, sweet corn, apple ber, coconut, and many more. Growpital farms are spread across the length and breadth of the country which diversifies their risk. Growpital caters to major clients like Ninjacart, Absolute foods, Jaipur Chakki, Khanna Ghani, Crophunt, and many more.
Growpital got their NCDs listed on the occasion of Dussehra. This is the first-ever NCD campaign on Tyke and it offers an extended internal rate of return of 19.91% for its subscribers. These NCDs are Fully secured against bills worth INR 1.87Cr+.
It makes more sense for investors to directly invest in Growpital using the code GROWRDIMES because it provides an LLP structure for investment that makes the income tax exempted compared to NCD investment through Tyke which will be taxed at the marginal rate
They are also doing an AMA on 11th Oct. You can join the AMA session with founders Rituraj Sharma and Krishnna Joshi to know how their campaign created a record on Tyke to be oversubscribed in just 6 hours!
My Investing Experience with Growpital
I made my first investment in Growital in Feb 2022. Since then I have made another investment in Growpital. Some of the points based on my experience
- The Payout has been regular and on time
- The team has been responsive to the queries and doubts I shared with them.
- The yields are lucrative considering they are tax-free, hence for people in higher tax brackets, the returns are substantially higher than most other conventional opportunities.
- Returns have a low correlation to the broad stock market hence lower portfolio volatility.
- The management does regular Ask Me Anything (AMA) sessions which help in getting more insights
I am gradually increasing my portfolio allocation to Growpital. I follow this process because it helps me to gauge any shortcomings of the platform which I might ignore initially. If the performance remains consistent I will further scale my investment in the next few months.
I do plan to visit one of the farms in the future. Please do comment if anybody has already visited the farm or is planning to do that.
Farmland investment is not a new concept. There are many successful companies around the world like Cropital, Farm together, Acre Funder, etc which provide investors the opportunity to invest in farmland. Agriculture if done correctly is profitable but there have always been problems like scale, cyclicity, labor requirement, demand creation, etc hence for most individuals it is not a feasible option. Growpital provides an innovative solution through managed farms.
I would be closely monitoring my portfolio and developments with the platforms and would update it in my portfolio monthly and periodic reviews.