Seeking expert opinion on holding vs exit of parternship-owned warehouse business
This query is : Resolved
26 January 2026
Hello,
I am seeking an expert opinion on whether it makes financial sense to continue holding or exit a minority stake in a warehouse business. Key details below:
- Business: Warehouse / cold storage (partnership firm)
- Ownership: 12.5% minority stake
- Project start: Feb 2022
- Private capital invested: ₹1 Cr (borrowed at 18% p.a.)
- No private repayment so far due to bank loan priority
- Effective private debt today: ~₹1.72 Cr
- Expected private debt when repayment starts (~2 years): ~₹2.05+ Cr
Best operating year (FY 2024–25):
- Revenue: ~₹2.05 Cr
- Operating surplus before loans: ~₹1.26 Cr
- Bank loan repayment: ~₹1.0 Cr/year
- Free cash (entire business): ~₹25–27 L/year
- Cash to us (12.5%): ~₹3–4 L/year
- Expected post–bank-loan cash to us: ~₹15–16 L/year
Additional context
- Major commodity stored: mirchi
- Revenue depends heavily on rotation; low prices have capped growth
- Land value has appreciated from ~₹1.0 Cr to ~₹1.7 Cr
Questions
1. Does holding make sense long term given 18% private capital and minority ownership?
2. Since this is a partnership firm, can any business loss or depreciation be used to offset personal salary income?
3. Does refinancing the 18% loan make sense? If so, what realistic interest rates are currently achievable (secured / LAP / business loan)?
4. Is an exit valuation of ~₹1.8–2.0 Cr reasonable for a strategic buyer increasing control?
Looking for a candid, numbers-based opinion.
Happy to share detailed workings if required.
I am seeking an expert opinion on whether it makes financial sense to continue holding or exit a minority stake in a warehouse business. Key details below:
- Business: Warehouse / cold storage (partnership firm)
- Ownership: 12.5% minority stake
- Project start: Feb 2022
- Private capital invested: ₹1 Cr (borrowed at 18% p.a.)
- No private repayment so far due to bank loan priority
- Effective private debt today: ~₹1.72 Cr
- Expected private debt when repayment starts (~2 years): ~₹2.05+ Cr
Best operating year (FY 2024–25):
- Revenue: ~₹2.05 Cr
- Operating surplus before loans: ~₹1.26 Cr
- Bank loan repayment: ~₹1.0 Cr/year
- Free cash (entire business): ~₹25–27 L/year
- Cash to us (12.5%): ~₹3–4 L/year
- Expected post–bank-loan cash to us: ~₹15–16 L/year
Additional context
- Major commodity stored: mirchi
- Revenue depends heavily on rotation; low prices have capped growth
- Land value has appreciated from ~₹1.0 Cr to ~₹1.7 Cr
Questions
1. Does holding make sense long term given 18% private capital and minority ownership?
2. Since this is a partnership firm, can any business loss or depreciation be used to offset personal salary income?
3. Does refinancing the 18% loan make sense? If so, what realistic interest rates are currently achievable (secured / LAP / business loan)?
4. Is an exit valuation of ~₹1.8–2.0 Cr reasonable for a strategic buyer increasing control?
Looking for a candid, numbers-based opinion.
Happy to share detailed workings if required.
28 January 2026
Exit Strategy: Prioritize an exit if the price is $\geq$ ₹1.75 Cr. The 18% interest is a "wealth killer."Refinance: If you must stay, you must refinance below 11% to make the math work.Commodity Risk: Relying on mirchi (chili) involves high seasonality and price volatility; a strategic buyer with a broader commodity basket is your best target.
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