Jain Irrigation will raise a total of $45 million from International Finance Corporation in equity and debt. IFC will infuse approximately $15 million by way of investment in equity shares in the company, which will amount to 2.69% of the company's equity on a fully diluted basis.
The drip irrigation major will allot upto 2 million equity shares of Rs 10 each to International Finance Corporation, the PE arm of the World Bank, on a preferential basis at a price to be decided according to SEBI guidelines.
The company has convened its shareholders' meeting on March 26 to approve the transaction. The capital infusion will help the company strengthen its balance sheet and meet regular growth capital expenditure, a statement said.
The diversified company said that it experienced a steady growth in its MIS/SIS, piping and food businesses in FY 09 also. With increased allocations to the water and agriculture sectors by Government, the company said, it is poised to maintain its growth rate in future.
IFC will also lend another $30 million to Jain Irrigation in two tranches for meeting the capital expenditure requirements. Besides this, IFC had lent $30 million in the last 24 months to the company.
Anil Jain, Managing Director of Jain Irrigation, said, “This equity infusion will strengthen the balance sheet of the company. IFC and company share common development goals in water conservation and rural development. This $45 million fund raising will also ensure capex needs of next year.”
International Finance Corporation (IFC) is a member of the World Bank Group. It recently announced its plans to finance a $15 million Indian project of WaterHealth International, Inc. IFC has been active in Indian private equity market with several transactions under its belt.