MUMBAI, Oct 8 (Reuters) - U.S. private equity firm Blackstone Group has paid $100 million for a 12.5 percent stake in India's International Tractors Ltd (ITL), it said on Monday, in a bet on the modernisation of India's farms.
India is one of the world's leading producers and consumers of agricultural commodities, and the farm sector accounts for about 15 percent of the economy, Asia's third largest.
"Trends such as ... rising labour costs are leading to increased adoption of mechanisation by farmers," Blackstone India chairman and managing director Akhil Gupta said.
Blackstone, the world's largest private equity fund, has to date invested about $2.7 billion in India.
ITL will use the $100 million partly to increase production, said LD Mittal, the firm's chairman. "We are also looking at buying out smaller component manufacturing companies mainly in Europe," he said without giving details.
ITL has annual turnover of around $500 million, and holds a 10 percent share of the domestic tractor market. It exports tractors to over 70 countries.
(Reporting by Indulal PM; Editing by Daniel Magnowski)
Keywords: BLACKSTONE INTERNATIONALTRACTORS/INVESTMENT (UPDAT