Jain Irrigation plans to raise Rs 792 cr by issuing shares

Jain Irrigation Systems today announced plans to raise Rs 792 crore by issuing equity shares in the company and its food subsidiary JFFFL to agri-business funding firm Mandala Capital and promoters.
A decision in this regard was taken by the board of directors of Jain Irrigation Systems (JISL) and Jain Farm Fresh Foods Limited (JFFFL) today, it said.
"JISL along with JFFFL today announced plans to raise equity of approximately Rs 792 crore with the primary purpose of accelerating JISL's balance sheet strengthening and also providing growth capital for JFFFL," Jain Irrigation said in a regulatory filing.
In the first stage, JFFFL will raise Rs 396 crore from Mandala by issuing preferential equity shares and compulsorily convertible debentures (CCDs).

Upon conversion of CCDs in five years, Mandala is likely to get 14.08 per cent or 17.13 per cent stake in JFFFL depending on its performance.
In the second stage, JISL will raise Rs 396 crore by making preferential issue of CCDs with 5 per cent annual coupon to Mandala for a subscription amount of Rs 2,85.1 crore.

The CCDs will be converted into ordinary equity shares of JISL within 18 months from the date of allotment of share at Rs 80 per piece or at such higher price as determined in accordance with the applicable SEBI norms.
In another round of fund raising, JISL will also make a preferential issue equity warrants to the promoters for an aggregate amount of Rs 110.9 crore at Rs 80 per share through a warrants structure, the company informed BSE.

JISL Managing Director Anil Jain said: "We are delighted to be putting together such a large equity investment from Mandala even in challenging global market conditions. Through the transaction, JFFFL is well funded for future growth."
"At the high-end of the agreed range, the valuation placed on JFFFL by Mandala's investment in JFFFL is almost equal to the entire current market capitalisation of JISL. This equity issuance is high value accretive for the company and a game changer," he added.
YES Securities acted as financial advisors to JISL for this transaction, the filing added.
In August, Jain Irrigation Systems said it will sell its food business unit to its subsidiary to create strategic focus on the fast-growing food business.

The food business of the company comprises food manufacturing units at Jalgaon (Maharashtra), Vadodara (Gujarat) and Chittoor (Andhra Pradesh) besides the indirect subsidiaries carrying on food business activities.
Jain Irrigation is engaged in manufacturing of micro irrigation systems, PVC pipes, HDPE pipes, plastic sheets, agro processed products, renewable energy solutions, tissue culture plants, financial services and other agricultural inputs since the last 34 years.