C.R. Narayanan & Co. was born out of the storied career forged by our founder and CEO, Christopher R. Narayanan.
His days as a ranch hand in Texas and his service in the U.S. Marine Corps prepared him for his transition to Wall Street by providing a strong work ethic, an analytical mind, and an unshakable determination.
We at C.R. Narayanan & Co. have grown the reputation of trusted advisor to our clients. We uniquely sit at the intersection of agriculture and investment banking, leveraging a depth and breadth of rare, specialized expertise.
Our view and tactical involvement in agribusiness has been holistic. Two examples of this experience follow.
Beyond the Numbers: Grasping the Connectedness of Risk
A major seed chemical company that manufactures a product with premier genetics wanted to sell its crop seed at a premium to the farming community. In return, the seed company planned to counterbalance the higher seed price with a guaranteed minimum crop price once the growers were ready to sell the crop.
The seed company needed to understand the different financial-risk scenarios that awaited them under this business model and to plan ahead to manage their uncertainty and risk.
The principal at C.R. Narayanan & Co. put together a three-fold options strategy for the seed company that examined where the seed and crop markets stood, what was the anticipated volatility in the markets, and what returns could potentially be gained for this client across the three different option scenarios.
This options strategy competed against others on Wall Street, and beat out the competition for the provision of investment banking services.
Ultimately, the seed company opted to move forward with the third scenario in the options strategy, a principal transaction through which banks submitted bids to the seed company explaining what they would do if the minimum-price guarantee was triggered for payout.
This options strategy was selected from amongst the competition because of the clear, deep grasp of agribusiness. While any investment bank could run the numbers, it was obvious that this options strategy was grounded in intimate knowledge of both the agricultural and the financial industries.
Holistic View of Models that Secured Better Financing
One of the United States’ largest restaurant chains, a significant buyer of beef and grain, sought to raise new capital in order to pay down debt.
At the time, beef prices were higher than normal due to a drought experienced a few years prior; however, grain prices had already stablized from the drought and were beginning to drop as supplies returned to normal.
To raise capital, the restaurant chain was leaning toward a bond issuance but first wanted to understand what interest rate they could potentially expect to pay to the bondholder.
To anticipate the possible interest rates and help create realistic expectations at the restaurant chain, the principal at C.R. Narayanan & Co. examined the full spectrum of the agribusiness supply chain to understand which segments were making or losing money and how those ebbs and flows in pricing were predicted to continue.
Financial models were put together for the restaurant chain so it could see how every aspect of the agribusiness supply chain might impact the bondholder’s terms and interest rates. Key questions were surfaced early on as the stage was set in the financial models, which made the restaurant chain more informed and better prepared to evaluate the options.
When financing was ultimately secured for this client, the interest rate was more favorable for the restaurant chain than it otherwise would have been if the overall, holistic agribusiness supply chain insight had not been factored in.