Introduction

Most farmers in India still sell their crops in mandis (agricultural markets). But in recent years, the government has been pushing for digital and modern ways of selling produce. One such platform is NERL (National E-Repository Limited), which allows farmers to store their crops in warehouses and trade digitally.

Recently, NERL’s unlisted shares have started trading in the grey market. This has caught the attention of investors. But what exactly does NERL do, and is it a good investment?

Let’s understand step by step — in simple, everyday language.

1. What Does NERL Do?

National E-Repository Limited (NERL) was established in 2017 and received its official registration from the Warehousing Development and Regulatory Authority (WDRA) in August of the same year. It was set up with the objective of creating a nationwide electronic repository system for agricultural commodities.

The platform enables the issuance and management of electronic Negotiable Warehouse Receipts (eNWRs), helping farmers, traders, and institutions to securely hold and trade commodities stored in WDRA-registered warehouses. NERL is promoted by the National Commodity and Derivatives Exchange (NCDEX), which holds the majority stake and oversees operational execution.

It is also backed by some of India’s most credible financial institutions, including NABARD (National Bank for Agriculture and Rural Development), which plays a key role in promoting agricultural finance and infrastructure. In addition, major banks like ICICI Bank, State Bank of India (SBI), and HDFC Bank are among its stakeholders, offering both financial strength and institutional credibility to the platform.

Together, these backers provide NERL with the required infrastructure, policy alignment, and trust to support the long-term transformation of agricultural trading in India. NERL is a company that allows farmers to store their crops in government-approved warehouses. Once the crops are stored, NERL gives a digital receipt called an eNWR (electronic Negotiable Warehouse Receipt). This eNWR works like proof that the crop is safely stored in the warehouse.

The farmer or trader can:

• Take a loan from the bank using this eNWR.

• Sell the crop later when prices improve.

• Avoid distress sale at low rates during harvest time.

Example:

Ramesh, a farmer, stores 100 quintals of wheat in a warehouse. He receives an eNWR through NERL. Instead of selling his crop immediately, he takes a loan from a bank using this receipt and waits 2 months. When the market price increases, he sells and earns more money.

2. Why Do Farmers Still Prefer Selling in Mandis?

Even though warehouse systems like NERL are available, most farmers still sell in mandis. Why?

• Quick Payment: In mandis, farmers get cash or bank transfer the same day.

• Old Habit: Farmers have been going to mandis for decades. They trust the system and know how it works.

• Less Awareness: Many farmers are not aware of NERL or eNWR.

• Distance Issues: Sometimes the nearest warehouse is far from the village.

Example:

Sunita, a farmer in Bihar, prefers selling in the local mandi. She doesn’t have a smartphone or internet connection and isn’t aware of how warehouse trading works. For her, mandi is the easiest and fastest option.

3. What Are the Benefits of Selling via NERL Warehouses?

For farmers who use NERL, there are multiple advantages:

• Loan Facility: Farmers can get loans using eNWR without selling their crop.

• Better Prices: They can wait for the right time and sell when prices are higher.

• Safe Storage: Crops are stored in clean, protected warehouses.

• Proof of Ownership: Digital receipts help build financial records.

Example:

Kavita Devi stores 50 quintals of soybean in a warehouse at Rs. 4,000 per quintal. She waits for two months and sells at Rs. 4,800 per quintal. She also takes a short-term loan using eNWR to cover her medical expenses during this time. She earns more and avoids selling in a hurry.

4. Why Isn’t NERL Used Widely Yet?

While NERL is a smart system, it still has limited adoption across India. Here's why:

• Lack of awareness: Many farmers have not even heard of it.

• Fewer warehouses: Government-approved warehouses are not present in every area.

• Bank delays: Some banks are slow to process eNWR-based loans.

• Digital gap: Not all farmers are comfortable with online systems.

Example:

A farmer group in Jharkhand tried using NERL, but the warehouse was 80 km away, and the bank took 3 weeks to approve their loan. They switched back to the traditional mandi system.

5. What Is the Government Doing to Promote NERL?

The government is trying to push warehouse-based trading and NERL through several steps:

• Interest subsidy: Farmers pay less interest on loans taken using eNWR.

• Linking with eNAM: NERL is being connected to the national agri market (eNAM) for better trade options.

• Training farmers and FPOs: Farmers and organisations are being trained to use warehouse receipts.

• More warehouses: Private companies are being allowed to set up WDRA-approved warehouses.

Example:

In Maharashtra, a pilot program helped 500 farmers sell crops digitally through NERL and eNAM. They earned 15–20% more than mandi prices, with timely payments and no middlemen.

6. Should You Invest in NERL’s Unlisted Shares?

In the last few months, NERL shares have started trading in the unlisted market. Investors are now curious whether it’s worth buying.

Reasons to Consider:

• Future-focused business: Agri warehousing and digital trade are growing in India.

• Backed by institutions: NERL is supported by NCDEX and NABARD.

• Policy support: Government is pushing for better agri infrastructure.

• First-mover advantage: Very few players are licensed to issue eNWRs in India.

Risks:

• No confirmed IPO date.

• Financials are still in bad shape due to no growth.

• Low liquidity in the unlisted market.

• Success depends on how quickly farmers adopt warehouse trading.

Conclusion

NERL may not be a "fast-return" stock, but it has strong potential as a long-term investment. The business is in the early stages, but it is aligned with government policies, farmer interest, and India's need for better agriculture infrastructure.

If you are a patient investor looking for early opportunities in India's growing AgriTech sector, NERL unlisted shares could be worth considering. But make sure to do your research, understand the risks, and invest only what you can hold for the long term.