Jain Irrigation jumps 4% on Rs 402-crore fund raising by subsidiary

NEW DELHI: Jain Irrigation Systems (JISL) jumped nearly 4 per cent in trade on Thursday after the company said its food processing arm has raised Rs 402 crore from Mandala Capital, in a bid to cut debt and fasten growth of the food processing business.

The food processing subsidiary, Jain Farm Fresh Foods ( JFFFL), has reported a revenue CAGR of 25 per cent between FY11 and FY15.

The fund raise, “will allow us to further growth the business in existing and new categories of fresh and processed fruits, vegetables and allied products. The business has significant potential backed by our position as a leading supplier to global FMCG giants like Coca Cola, Frito-Lay, Nestle and Unilever,” Anil Jain MD, JISL said.

Following the development, the stock jumped 3.57 per cent to hit a high of Rs 60.85 on BSE.

JFFFL is a newly-formed entity under which the global food processing business of JISL will now be held, the company said in a regulatory filing.

"JFFFL made a preferential issue of equity shares and compulsorily convertible debentures (CCDs) to Mandala for a total subscription amount of Rs 4,022 million. 60 per cent of the investment is in equity and balance in CCDs," it said.

Upon conversion of CCDs, Mandala will own a total stake of either 14.27 per cent or 17.35 per cent in JFFFL, based on revenue parameters, the company added.