Mumbai: Jain Irigation Systems expects to finalise by March end partners for a 30% stake in its non-banking financial venture, which it hopes to launch by July, a top official said on Tuesday.
“I think this month we should make an application to RBI for a licence. Sometime in June-July, we should be ready to launch,” managing director Anil Jain said over the telephone.
The company had in late January 2011 said it would rope in partners for its non-banking financial company (NBFC), allaying fears of investors who had pummelled its shares by a quarter in five trading sessions after it announced intention to enter the sector.
Jain Irrigation, which has a net debt of Rs2100 crore as of 31 December, plans to raise up to $150 million through a share sale, which will be launched in “next few months”, Jain said.
“We are not looking at a very long time. It will happen shortly. All our processes will be in place by 9 March. Depending on the market, we will go ahead and do it,” he said.
The company, which is the world’s largest producer of micro-irrigation systems, and also makes PVC pipes and processes fruits and vegetables, will seek shareholders’ approval for the fund raising plan on 9 March, Jain said, adding, the share sale will “definitely not” happen at current price.
On Tuesday, shares of Jain Irrigation ended up 5.4% at Rs193.45 in the Bombay Stock Exchange.
“Whatever indications I’m getting from investors, it’s quite positive. So whenever the time is optimum, we’ll go ahead and do it,” he said, referring to the share sale.
Jain expects the rural thrust in the FY12 federal budget to boost its business.
Keen to restrain rising food inflation, the government has in its national budget on Monday taken steps to spruce up fresh food distribution systems by building cold storage facilities and to make more loans available to farmers.
Finance minister Pranab Mukherjee has proposed measures to boost pulses, cereals, and vegetable cultivation and oil palm plantations. He has allocated Rs400 crore to usher in green revolution in the country’s eastern rice growing areas.
“It is a very positive budget for all our products,” Jain said.
“The momentum for rural India for last two-three years was good. Now, things should get even better, with more credit support, new programmes, access to lot more resources. So, overall we remain very bullish and positive on what we can deliver.”
Jain, which had revenues of Rs2740 crore in the year to March 2010, expects FY11 revenues to rise by a quarter in FY11.