Startup Deep Dive : Sohan Lal Commodity Management — the warehouser that owns no warehouses

Sohan Lal Commodity Management looks after farm commodities worth ₹8,958 crore ($933 million, at $1 ≈ ₹96.0 as of 18 September 2026, Trading Economics) across a network of more than 1,958 warehouses, and it does not own a single one of them. That figure is not a slogan: the value of commodities under management as on 31 March 2025 comes straight from a CARE Ratings press release, and the leased-warehouse model is confirmed in the same document, which notes there are “nil sanctioned bank limits in SLCM” and that the group hires godowns it can hand back on a month’s notice.

The other number that frames this company is stranger still. On a consolidated basis its revenue barely moved for three years — ₹487.02 crore in FY23, ₹475.96 crore in FY24, ₹482.10 crore in FY25 (provisional), per CARE Ratings — yet its net profit swung from ₹3.10 crore to ₹17.83 crore and back down to ₹15.80 crore over the same window. A warehouser that owns no warehouses, whose top line stands still while its bottom line lurches: that is the puzzle this deep dive works through, using audited and rating-agency figures rather than the marketing deck.

Quick facts

What SLCM actually does

SLCM sells the management of stored grain, not the storage. Per the CARE Ratings press release of July 2025, the group is a technology-enabled, single-window supply-chain solutions provider for agri-commodities, and it runs across four legal entities with, in CARE’s words, “strong operational and financial linkages” under common management. In plain terms, the group leases warehouses near mandis, receives farmers’ and traders’ produce, grades and fumigates and insures it, issues a storage receipt against it, and then lets other parts of the group lend against that receipt or buy the commodity outright. Its customers are farmers, farmer producer organisations, traders, large corporates and banks that need warehouse receipts they can trust as collateral.

The origin: a pulse mill and a barcode

The company carries a family name because it began as a family business. As reported by Inc42, Sandeep Sabharwal’s grandfather came to India as a refugee after Partition and set up a pulse-processing unit in Delhi; his father, a chemical engineer who had worked with the DCM Shriram group, took early retirement to run it. Sabharwal, an MBA from the Fore School of Management, took the business over and pointed it somewhere new. The pivot, in his telling to AsiaConverge, was mundane and decisive at once: in 2004 he rented a warehouse on Lawrence Road in Delhi and started issuing farmers bar-coded warehouse receipts against the goods they stored.

The barcode was the whole idea. A receipt a bank could rely on turned a heap of grain into collateral, and turned a warehouse from a shed into a piece of financial infrastructure. SLCM was formally incorporated in 2009, per CARE Ratings, and built its edge not on real estate but on the software and process wrapped around each sack — a system the group now markets as Agri Reach and Agri Suraksha, integrated with an SAP-based platform for electronic commodity-based funding. The founding insight was that the trustworthy receipt, not the building, was the scarce asset worth owning.

The struggle years

The group’s hardest lessons landed on its lending arm and its procurement arm, and both are documented. Kissandhan, the group’s non-banking finance company, had reported no non-performing assets until March 2018, per CARE Ratings. Then the agrarian stress of those years produced what CARE describes bluntly as “instances of embezzlement and forceful lifting of stocks by borrowers.” One borrower in particular, Jai Hanuman Rice & General Mills, left an outstanding exposure of ₹12.90 crore as of December 2022, still ₹9.03 crore by March 2024 after write-offs. Kissandhan’s gross NPA ratio spiked to 9.58% as on 31 March 2022. The response was drastic: the NBFC downsized, repaid its borrowings to nil by FY22, and rebuilt around a different, safer loan book.

The procurement subsidiary, North End Foods Marketing (NEFM), carried the group’s other long-running wound. Per CARE Ratings, NEFM faced GST issues from FY20 involving stock seizures and blocked input tax credit. Even after favourable orders, the department revived proceedings and, in July 2023, raised a demand of roughly ₹389 crore; a further ₹14.80 crore demand for FY20 took the total contingent liability to ₹404.51 crore — a number larger than a full year of the whole group’s revenue. The Allahabad High Court stayed the demand, and on 12 May 2025 it dismissed the department’s writ, upholding the appellate authority’s earlier favourable order. CARE still lists any fresh materialisation of that liability as a key monitorable.

The turning point

The turn was not a single deal but a deliberate reweighting after the fraud years, and its clearest signature is in Kissandhan’s own numbers. Until FY20 the NBFC was, per CARE Ratings, “entirely engaged in commodity-based financing.” After the embezzlement episodes it shifted its lending toward microfinance institutions and microfinance loans routed through business correspondents, plus loans to farmer producer organisations. By 31 March 2024 the mix had inverted: lending to MFIs was the majority at 53%, microfinance-through-BC was 35%, and the original commodity-based finance was down to just 6% of the book. The commodity-finance company had, in effect, become mostly a microfinance company.

The payoff shows on both sides of that pivot. Kissandhan’s gross NPA fell from 9.58% in March 2022 to 4.39% in March 2023 as new slippages stopped, and its net interest margin climbed to 12.2% in FY24 from 11.3% the year before, per CARE Ratings. At the group level the same discipline reads as an operating-profit jump: consolidated PBILDT rose from ₹10.06 crore in FY23 to ₹27.74 crore in FY24 and ₹33.74 crore in FY25 (provisional), even though revenue never grew. The group traded scale for margin, and the rating agency rewarded it with a stable outlook.

The money behind it

SLCM raised most of its equity in a burst between 2011 and 2015, then largely stopped. The rounds that are documented in dated primary and press sources:

• March 2011 — ₹35.5 crore from Mayfield India and Nexus Venture Partners, the group’s first institutional cheque (YourStory).
• November 2012 — about $23.5 million (₹129.3 crore) from Everstone Capital, which took a 25.55% stake, and ICICI Bank, which took 6.93% (YourStory).
• September 2015 — ₹100 crore from Creation Investments Capital Management and Everstone Capital, earmarked to scale up the Kissandhan agri-financing arm (YourStory).
• March 2017 — $20 million, but as a secondary stake sale: responsAbility Investments and Incofin bought out part of the holdings of Everstone, Mayfield, Nexus and ICICI’s Emerging India Fund, rather than adding fresh capital (Business Standard).
• 2019 — a $3 million loan from the International Finance Corporation (IFC) to the Myanmar subsidiary, SLCM Limited — debt to expand warehousing in Myanmar, not equity in the parent (IFC pressroom).

The authoritative backer list, as named in the CARE Ratings press release of July 2025, is seven private-equity funds with board nominees: Nexus Venture Partners, Mayfield Fund, Everstone Capital, Creation Investments Capital Management LLC, Emerging India Fund, responsAbility Investments AG and agRIF Cooperatief UA. Two notes on sourcing, in line with keeping only what checks out:

• Total raised: startup trackers report aggregate funding of roughly $48.5 million across five rounds (Crunchbase/Tracxn), though the trackers disagree — one puts the tracked figure closer to $25 million — so it is safest to rely on the dated rounds above than on a single headline total.
• Backers to treat carefully: IFC is a lender to the Myanmar arm, not an equity holder in the parent; and no source opened for this piece places NABARD’s Nabventures on SLCM’s cap table, so that association is left out rather than asserted.

How it makes money

The group earns from three linked motions around the same stored commodity, and the margin does not sit where the brand name suggests:

• Warehousing and collateral management (SLCM): fees for storing, grading, fumigating, insuring and monitoring commodities, increasingly on a revenue-sharing rather than fixed-rent basis. CARE notes this business runs on “thin margins/losses on a standalone basis” because of the heavy spend on monitoring and risk management — it is the backbone that makes the other two businesses possible, not the profit centre.
• Procurement (North End Foods Marketing): buying commodities to order for clients. To manage price risk, per CARE, NEFM keeps purchases order-backed with the price fixed at contract, seeks a 20–25% advance margin on non-exchange-traded commodities, makes margin calls on mark-to-market losses above 5%, and liquidates stock if margin falls below 10%.
• Agri lending (Kissandhan): interest income on loans extended against SLCM’s own warehouse receipts, at a loan-to-stock-value ratio of 70–80%, plus its newer MFI and microfinance book. Kissandhan reported a net interest margin of 12.2% in FY24 (CARE Ratings).

The part outsiders get wrong is the ownership. SLCM does not own warehouses; it leases them on terms it can exit at a month’s notice, which is why CARE records nil term debt and nil sanctioned bank limits at the SLCM level. The asset it does own is the receipt-and-monitoring system that lets a bank treat a farmer’s grain as bankable collateral.

The numbers

All figures below are consolidated for the SLCM group (SLCM, NEFM, SLCM Myanmar and Kissandhan) as published by CARE Ratings in July 2025. Unit is ₹ crore. FY23 and FY24 are audited; FY25 is provisional.

Three things stand out, none of them requiring embellishment. Revenue is essentially flat-to-down across the three years, which CARE labels a “stagnant scale of operations.” Operating profit more than tripled over the same period as the group managed costs and leaned on higher-margin services. And net profit does not track operating profit in FY25: PBILDT rose to ₹33.74 crore while PAT slipped to ₹15.80 crore from ₹17.83 crore — the divergence the hook flagged. CARE does not attribute a single cause to the PAT dip, so this piece does not either; what is verifiable is that the balance sheet strengthened alongside it, with net worth up to ₹348.31 crore in FY25 (provisional) from ₹331.91 crore, gearing down to 0.19 times, and total debt cut to ₹66.30 crore from ₹114.99 crore a year earlier.

Where the money comes from

The revealing split is which entity actually carries the group’s revenue and which carries its risk. CARE Ratings is explicit on both:

• Revenue concentration: at the consolidated level, the group “derives TOI majorly from NEFMPL” — the procurement subsidiary, not the flagship warehousing brand. CARE ties FY25’s muted growth to NEFM securing large orders with longer holding periods, which tied up capital for extended cycles and reduced the churn of capital employed.
• Commodities under management: the value of commodities managed fell to ₹8,958 crore as on 31 March 2025 from ₹10,928 crore a year earlier (CARE Ratings) — a reminder this is a flow-and-custody business whose scale moves with commodity prices and stock limits, notably government stock limits on wheat that CARE says reduced SLCM’s business.
• Lending book, by product: inside Kissandhan, the surprise is that as of 31 March 2024, MFI lending was 53% of the book, microfinance via business correspondents 35%, farmer-producer-organisation loans the balance, and the original commodity-based finance just 6% (CARE Ratings). The group’s “commodity finance” NBFC now lends mostly to microfinance channels.
• Geography: beyond India — where CARE records presence in 18 states and coverage of over 1,000 mandis — the group runs a Myanmar warehousing subsidiary that, per IFC, managed 3.24 million square feet of storage across 127 industrial zones handling 10.14 million tonnes at the time of IFC’s $3 million loan, with post-harvest losses cut to a company-stated 0.5%.

The risks

The most useful risk list here is the one the rating agency itself puts in writing. Per CARE Ratings, July 2025:

• Commodity-price and monsoon exposure: the group’s performance depends on agri-commodity prices, monsoon conditions and the wider economic environment; price gaps between mandis and exchanges can trigger customer disputes and litigation. This is the risk mechanism behind the flat revenue — SLCM’s scale, CARE says, “was affected by fluctuations in agricultural commodity prices.”
• Government stock limits and regulation: stock limits on essential items, particularly wheat, cut warehouse occupancy and business; MSP changes and stock rules squeeze NEFM’s procurement holding periods and margins.
• GST contingent liability: NEFM’s ₹404.51 crore GST demand — dismissed in the group’s favour on 12 May 2025 but still capable of revival — remains, in CARE’s words, a “key monitorable” that could hit liquidity if it materialises.
• NBFC asset quality and competition: Kissandhan’s gross NPA was 4.78% as on 31 March 2024, weighed down by the legacy Jai Hanuman account, and it must compete for borrowers against banks and NBFCs that can lend more cheaply, making its ability to hold its spread critical.
• Lease and occupancy risk: because warehouses are leased at strategic locations, rising rentals cannot always be passed on, and crop failure in a location can leave leased space under-utilised — though the month’s-notice de-hiring clause blunts this.

The takeaway

The transferable lesson from SLCM is that owning the trust can beat owning the asset. The company’s competitors could all rent the same sheds; what SLCM built was the barcode-and-receipt apparatus that made a bank willing to lend against a farmer’s grain, and it kept its balance sheet light enough to walk away from any single building on a month’s notice. That choice shows up years later as a rating agency noting “nil sanctioned bank limits” and gearing of 0.19 times — an asset-light structure that survived an embezzlement wave in its lending arm and a nine-figure tax demand in its procurement arm without breaking. The flip side is the ceiling the same choice imposes: three years of flat revenue, a scale CARE calls stagnant, and profits that swing with margins rather than growing with size. Infrastructure built on trust is resilient and hard to scale at once — SLCM is a clean case study in paying for the first with the second.

Frequently asked questions

Who founded Sohan Lal Commodity Management and when?

The group is led by Sandeep Sabharwal, its group CEO and promoter, who redirected a family pulse-processing business by renting a Delhi warehouse in 2004 and issuing bar-coded warehouse receipts; the flagship entity, SLCM, was incorporated in 2009 (CARE Ratings; Inc42).

Is SLCM profitable, and what does it earn?

Yes. On a consolidated basis the group reported net profit (PAT) of ₹17.83 crore in FY24 (audited) and ₹15.80 crore in FY25 (provisional), on total operating income of about ₹476–482 crore, per CARE Ratings, July 2025.

Does SLCM own its warehouses?

No. The group operates an asset-light, leased model and, per CARE Ratings, can de-hire warehouses on a month’s notice; the rating notes nil term debt and nil sanctioned bank limits at the SLCM level. It managed commodities worth ₹8,958 crore across more than 1,958 warehouses as on 31 March 2025.

Is SLCM listed on the stock exchange?

Not as of the July 2025 rating. It converted into a public limited company on 18 July 2024 in preparation for an IPO; press and rating documents in 2023–2024 discussed an issue in the ₹350–700 crore range, but no listing had occurred by the latest available rating.

Who are SLCM’s investors?

Per CARE Ratings, July 2025, the group’s equity backers are seven PE funds with board nominees: Nexus Venture Partners, Mayfield Fund, Everstone Capital, Creation Investments Capital Management LLC, Emerging India Fund, responsAbility Investments AG and agRIF Cooperatief UA. IFC separately lent $3 million to the Myanmar subsidiary.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• CARE Ratings (CareEdge) — Sohan Lal Commodity Management Limited, press release, July 2025 (consolidated FY23–FY25 financials, AUM, warehouse network, investors, GST litigation, rating).
• CARE Ratings (CareEdge) — Kissandhan Agri Financial Services Private Limited, press release, June 2024 (NBFC AUM, PAT, NIM, GNPA, product mix, IPO plan).
• Inc42 — deep dive on SLCM’s profit surge and asset-light agritech model, 2024 (profit growth, Kissandhan disbursements, quality-check app, headcount).
• YourStory — SLCM raises ₹100 crore, September 2015 (2011, 2012 and 2015 funding rounds and metrics).
• Business Standard — responsAbility and Incofin invest $20 million in SLCM, March 2017 (secondary stake sale, prior investors); and SLCM IPO plan, October 2023.
• IFC pressroom — IFC provides a $3 million loan to SLCM Limited, Myanmar, 2019 (Myanmar operations, tonnage, post-harvest loss reduction).
• Wikipedia — Sohan Lal Commodity Management (founding, headcount, awards; used only for background corroborated elsewhere).
• Business Standard — SLCM and Bank of Baroda collateral-management tie-up, November 2024.

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