India’s Arya.ag Defies Crop Price Dip, Wins Investors & Profits: A Deep Dive
In a global agricultural landscape increasingly buffeted by volatility, India’s Arya.ag is emerging as a remarkable success story. While falling commodity prices and economic headwinds challenge agribusinesses worldwide, this agritech innovator continues to attract investment and maintain profitability. Arya.ag distinguishes itself by offering crucial storage facilities near farms and providing accessible lending services to hundreds of thousands of farmers, effectively bridging the gap between harvest and market. This article delves into the strategies behind Arya.ag’s resilience, its recent funding round, and its ambitious plans for the future, examining how it’s reshaping the Indian agricultural ecosystem.
The Global Agricultural Price Downturn & Arya.ag’s Counter-Strategy
The World Bank has issued warnings about the ongoing decline in agricultural commodity prices, citing risks stemming from extreme weather events, escalating input costs, trade disruptions, and evolving biofuel policies. These factors create a precarious environment for businesses, exposing them to significant price fluctuations and potential inventory losses. However, Arya.ag is navigating these challenges by deliberately avoiding direct commodity speculation and implementing a business model designed to absorb the impact of falling prices.
Key to Arya.ag’s strategy is its focus on providing infrastructure and financial services rather than directly trading commodities. This approach minimizes exposure to market volatility and allows the company to generate revenue through storage, lending, and platform fees.
Arya.ag: From Inception to $81 Million Series D Funding
Founded in 2013 by former ICICI Bank executives Prasanna Rao, Anand Chandra, and Chattanathan Devarajan, Arya.ag was born from a simple yet powerful idea: empowering farmers with greater control over their sales. The Noida-based startup addresses a critical pain point in Indian agriculture – the lack of adequate storage facilities and access to affordable credit. This often forces farmers to sell their crops immediately after harvest, when prices are at their lowest.
The company’s recent $81 million Series D funding round, led by GEF Capital Partners, is a testament to its success and potential. According to Arya.ag, over 70% of this round constitutes primary capital, with the remainder coming from secondary share sales. This substantial investment will fuel the company’s expansion and further development of its technology platform.
How Arya.ag Works: A Three-Pronged Approach
Arya.ag’s business model revolves around three core pillars:
- Storage Solutions: Providing secure and accessible storage facilities near farms, allowing farmers to store their crops and avoid distress sales.
- Lending Services: Offering loans against warehoused grain, providing farmers with immediate cash flow to meet their needs.
- Market Linkages: Connecting farmers with a wider network of buyers, including agri-corporations, processors, and millers, ensuring fair prices and better market access.
This integrated approach creates a virtuous cycle, benefiting both farmers and buyers while generating revenue for Arya.ag.
Scale and Performance: Impressive Numbers & Low NPAs
Arya.ag operates at a significant scale, setting it apart from traditional lenders and smaller agribusiness platforms. The company currently aggregates and stores approximately $3 billion worth of grain annually – roughly 3% of India’s national output. Furthermore, it facilitates around $1.5 billion in loans each year, while maintaining an impressively low gross non-performing asset (NPA) rate of below 0.5%, even amidst the recent price declines.
This low NPA rate is a direct result of Arya.ag’s conservative lending practices. The company only lends a portion of the stored grain’s value and closely monitors prices, implementing margin calls when necessary. Borrowers can respond by repaying part of the loan or adding more grain as collateral, mitigating the risk of losses.
“You’re not immune to risks,” explains Prasanna Rao, Arya.ag Co-founder and CEO, in an interview with GearTech. “But because your lending is completely secured against commodities, it will never happen that the prices will fall by 90%. You already have a margin of 30%, and with your mark to market, you’ve been able to control your NPAs and defaults.”
Financial Performance & Revenue Streams
Arya.ag’s financial performance demonstrates its robust business model. In the fiscal year ending March 2025, the company generated net revenue of ₹4.5 billion (approximately $50 million). The first half of the current financial year saw revenue growth of around 30% year-over-year, reaching ₹3 billion ($33.3 million). Profit after tax stood at ₹340 million (about $3.78 million) last year and has further increased by 39% so far this year.
Arya.ag’s revenue streams are diversified:
- Storage: Accounts for approximately 50-55% of total revenue.
- Finance: Contributes 25-30% of total revenue.
- Commerce: Makes up the remaining portion of revenue.
Reaching Farmers & Loan Disbursement
Arya.ag currently reaches between 850,000 and 900,000 farmers across 60% of India’s districts, operating through a network of approximately 12,000 agricultural warehouses, all leased from third parties. The company disburses over ₹110 billion (about $1.2 billion) in loans to farmers annually. Of this amount, ₹25 billion to ₹30 billion (roughly $278 million–$333 million) comes from its own balance sheet through its non-banking finance arm, with the rest originated for partner banks.
Arya.ag’s loan interest rates, ranging from 12.5% to 12.8%, are significantly lower than the 24% to 36% typically charged by commission agents, although slightly higher than bank lending rates of around 11% to 12%. This competitive pricing, coupled with the convenience of quick loan approvals (under five minutes) and almost entirely digital disbursement, makes Arya.ag a compelling option for farmers.
The Role of Technology: AI, Satellite Data & Blockchain
Technology is at the heart of Arya.ag’s operations, enabling it to manage risk, scale efficiently, and deliver superior services. The company leverages:
- AI: To assess grain quality for lending decisions.
- Satellite Data: To track crop stress before harvest, providing valuable insights for risk assessment.
- Sensor-Enabled Storage Bags: Airtight bags equipped with sensors allow for extended grain storage, even in areas lacking formal warehousing facilities.
- Blockchain: A blockchain-based system digitally tracks stored grain, ensuring transparency and security across lending and trade transactions.
Arya.ag plans to further invest in these technologies, expanding smart farm centers and deploying more digital tools closer to farms.
Future Outlook: IPO & International Expansion
With its recent funding and improving profitability, Arya.ag is aiming to be IPO-ready within the next 18 to 20 months. Beyond India, the company plans to expand selectively through a software-led model, with its technology already deployed in parts of Southeast Asia and Africa.
Arya.ag currently employs over 1,200 full-time employees and continues to grow its team. The company’s success story highlights the potential of agritech to transform the agricultural sector, empowering farmers and creating a more sustainable and efficient food system.
Avendus served as the financial advisor for Arya.ag during this funding round.