International Finance Corporation (IFC), the private-sector investment arm of the World Bank, is looking to invest up to $50 million (Rs 335 crore) in paper manufacturer JK Paper Ltd.
IFC will make the investment by subscribing to secured non-convertible debentures (NCDs) of the Singhania Group company, it said in a disclosure.
IFC currently holds 4.71% in JK Paper. It invested $11.29 million in the paper company in February 2006, show data from VCCEdge, the data research arm of VCCircle.
JK Paper is one of India's largest producers of office, printing, writing and specialty paper, and packaging boards. It will use the investment to increase productivity at its two plants in Odisha and Gujarat, and to refinance existing debt. The company, whose consolidated revenue stood at Rs 2,555.30 crore in 2016-17, is saddled with a long-term debt of Rs 1,300 crore.
JK Paper is not IFC's only bet in the space. In 2014, it signed a definitive agreement with Bilt Paper BV, a step-down subsidiary of India’s largest paper company Ballarpur Industries Ltd (Bilt), for subscription of new shares worth $100 million, following which it owned 14.29% in Bilt Paper.
Earlier this month, IFC had announced that it will sell its entire 7.5% stake in Analjit Singh-led Max Group’s healthcare business for Rs 423 crore ($65.3 million). It is also planning to invest up to $200 million in HDFC through five-year NCDs or masala bonds.
In April, IFC said it planned to invest in Fullerton India Credit Company Ltd and Capital First Ltd via NCDs. Fullerton planned to use the capital for lending to micro, small and medium enterprises.