Jayant Oils plans to raise $50 million

MUMBAI: Mumbai-based castor oil products manufacturing company Jayant Oils & Derivatives (JODL) on Sunday said it plans to raise $50 million (about Rs 200 crore) through private equity placements.

We have has approached two-three private equity players and the deals are expected to be sealed by February- end, JODL Managing Director Rajesh M Kapadia told reporters here.

"This (investments) should be done in the next one-two months. We are talking with up to three PEs," Kapadia said, without divulging further details about the deal.

JODL has an average annual turnover of over Rs 800 crore and is exporting 75 per cent of its products to nearly 44 countries, including US, UK, France, Japan & Australia, Kapadia said.

In order to fund its future growth, the company has also plans to tap the capital market in the next 18-24 months by diluting a small stake in the parent company, Kapadia said.

He did not disclose details of the stake dilution. The company has an R&D facility in Mumbai, which would be expanded in the coming three years at an estimated project cost of Rs 25 crore.

In order to strengthen its research division, the company has plans to tie up with Panjabrao Deshmukh Agriculture University, Agricultural Research Service (ARS) of United State Agricultural Department (USDA) and IIT, Kharkpur, he said.

The company had launched contract farming in 2005, under which the company supplies hybrid seeds to farmers free of cost. The company has earmarked an investment of Rs 75 crore in the next three years in contract farming, besides offering other facilities in transportation, threshing of castor and providing technical know-how, Kapadia said.

Under the scheme, JODL will also purchase the entire produce of castor from the farmers at an assured minimum price, he said. The company has nearly 7,000 farmers in Maharashtra, benefiting from the contract farming scheme.

The company has also plans to increase the castor cultivation to 1,00,000 acres by 2009, from the current 20,000 acres, he added.