19 July 2019

CDC and Lok Capital invest in Indian dairy processing company, HR Food

New investment will boost incomes for local farmers in eastern India, improve milk quality and expand manufacturing facilities 


CDC, the UK’s development financial institution, and Lok Capital have today announced a co-investment in HR Food Processing Pvt Ltd, the largest private dairy processing company in Jharkhand, India. CDC will invest US$8 million (INR 55 crores) alongside US$2.4 million (INR 16.5 crores) from the Lok Capital Growth Fund (LCGF).


Established in 2012, HR Food sources its milk from over 23,000 smallholder farmers across rural villages in Bihar, eastern India. It processes the milk at its two manufacturing facilities in Jharkhand and distributes its products through almost 10,000 distributers and retailers in Jharkhand and Bihar. CDC and Lok Capital’s investment will enable the company to buy milk directly from an additional 40,000 smallholder farmers across 1,000 new villages in Bihar and West Bengal over the next five years.


In India, dairy farming contributes to about a third of the gross income of rural households and the sector plays a vital role supporting economic growth and poverty alleviation for small scale farmers. 90% of HR Food’s suppliers are low income farmers and 30% live below the poverty line.  In their latest impact assessment Lok Capital estimates that 4,800 households have moved out of poverty since supplying to HR Food. The investment will support efforts to achieve UN sustainable development goals 1 (No Poverty) and 2 (Zero Hunger).


Muru Murugappan said:

“We’re delighted to be working alongside Lok Capital to invest in a company that plays a vital role in the lives of thousands of farmers, their communities and local economies. HR Food provides farmers with a fair deal through price transparency, providing reliable demand, timely payments and support to improve the quality and quantity of their milk. Our investment will help the company broaden its milk sourcing network, expand its manufacturing facilities in Bihar and extend its market penetration in a number of low-income states including Bihar and West Bengal.”


Vishal Mehta Co-founder & Partner, Lok Capital Said:

“HR Foods is a high impact, commercial venture and we are delighted that CDC, one of Lok’s core LPs, is investing alongside us. With this new capital we want the company to expand its market reach and establish a leadership position in its region of operation, both in terms of products and sales, as well as farmer connections. This new capital will also be used to establish a third plant as well as for the technology investment at the collection centres to ensure better and more direct farmer association.”


CDC’s relationship with Lok Capital dates from 2006 and has been strengthened through CDC’s commitment to three funds, as well as investment in Lok-managed companies (Equitas, Utkarsh, Ujjivan and Veritas).


In 2016, CDC committed US$20 million to US$88 million Lok Capital Growth Fund (LCGF), the third fund raised by Lok Capital. LCGF initially invested US$5.2 million in HR Food in 2016.




Rhyddid Carter rcarter@cdcgroup.com +44 (0)7824 552326

Vishal Mehta, Lok Capital +91 98182 74810


Notes to Editors:

  1. CDC Group plc is the UK’s development finance institution. Wholly owned by the UK Government, it invests in sub-Saharan Africa and South Asia with the aim of supporting economic development to create jobs.  CDC Group plc has invested in India since 1988.  Find out more at cdcgroup.com


  1. CDC takes a flexible approach and provides capital in all its forms, including equity, debt, mezzanine and guarantees, to meet businesses’ needs and achieve development impact. CDC has net assets of £5.9bn.


  1. Lok Capital is an impact investment venture capital firm was established in 2004. The firm backs start-ups and entrepreneurs in segments such as financial services, healthcare and the food and agriculture sectors.


Lok Capital had raised $22 million for its first fund, $65 million in its second outing and $90 million for third fund. It is looking to make the first close for its fourth fund at $100 million by September this year for investments in financial services, financial technology, healthcare and food and agriculture sectors. Earlier this month, Lok Capital invested in digital insurance platform RenewBuy and organic dairy company Akshayakalpa.


Lok Capital’s previous investments include Veritas Finance, Ummeed Housing, HR Food, Dr. Mohan’s Diabetes Chain, Ujjivan Financial Services, Vistaar Financial Services, Drishti Eye Care and Utkarsh Small Finance Bank.

CDC is becoming British International Investment