Jain Irrigation's Rs 792-cr stake sale gets CCI approval

Jain Irrigation Systems (JISL) today got CCI approval for selling its stake worth Rs 792 crore in the company and its food subsidiary JFFFL to agri-business funding firm Mandala Capital.
The company had announced the plan in November last year to raise capital with the primary purpose of accelerating JISL's balance sheet strengthening and also providing growth capital for JFFFL.
The Competition Commission of India (CCI) has approved "acquisition of stake in Jain Farm Fresh Foods Ltd (JFFFL) and Jain Irrigation by Mandala Rose and Mandala PrimRose Co-Investment Ltd", the regulator said in a tweet.
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 up to 17.13 per cent stake in JFFFL depending on its performance.
In the second stage, Jain Irrigation Systems Ltd (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 285.1 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.

"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," JISL Managing Director Anil Jain had said during announcing the deal.
"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 had said.
YES Securities is acting as financial advisors to JISL for the transaction, the company had said.

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.