Jain Irrigation plans Rs.792 crore equity issue

Jain Irrigation Systems Ltd (JISL) on Friday announced plans to raise Rs.792 crore to strengthen its balance sheet and provide growth capital for subsidiary Jain Farm Fresh Foods Ltd. (JSSL).

"Of the total equity fund, JFFFL will raise Rs.396 crore from Mandala Capital Ltd. through preferential issue of equity shares and debentures that will be converted into shares within five years at a determined issue price," the company said in a statement here.

Mandala, a leading private equity firm investing in food and agri-business in the country, will get 14.08 percent and 17.08 percent equity stake (after conversion of debentures) in JFFL for its investment.

It will also invest Rs.285 crore in JISL at Rs.80 per share through convertible debentures at five percent annual coupon, while promoters will invest Rs.111 crore at Rs.80 per share through warrants.

"The funds will also be used to de-leverage and growth JFFL's business and have net debt-equity ratio of 1:1 over time," the statement said.

The transactions are expected to be completed by December.

"We are putting together such a large equity investment from Mandala in challenging global market conditions for sustainable growth," said JISL managing director Anil Jain in the statement.

The funds will also be used to support organic and inorganic growth of the subsidiary's global food business.

As an Indian multinational, the Rs.6,000-crore Jain group has manufacturing plants in 28 countries the world over to make micro irrigation systems, PVC pipes, HDPE pipes, plastic sheets, agro-processed products, renewable energy solutions, tissue culture plants, financial services and other agricultural inputs.