Jain Irrigation to dilute 30% stake in proposed NBFC

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Mumbai, Feb 3 (PTI) Drip irrigation firm JainIrrigation Systems today said it is in talks with around fiveentities to sell 30 per cent stake in its proposed non-bankingfinancial company (NBFC) business.

"We are in advanced talks with around five entities,including multilateral institutions, national level banks andprivate equities, to dilute 30 per cent stake in our proposedNBFC," Jain Irrigation Managing Director Anil Jain toldreporters here.

He said the company is waiting for positive markettrend to go ahead with the dilution. Post-stake sale in NBFC,the promoter holding in Jain Irrigation is expected to comedown to 29 per cent from the present 31 per cent.

The rest 20 per cent of the NBFC will be held by theJain family and 50 per cent by Jain Irrigation, he said.

The company had recently said it is planning to raiseUSD 150 million (Rs 700 crore) through Qualified InstitutionalPlacement (QIP).

The proposed NBFC will increase the cash flow of thecompany, which in turn, will be able to give better productdiscounts to its customers, Jain said.

The firm is, however, yet to apply to the Reserve Bankfor a license, he said. "We will soon apply for license to theRBI and are hoping to register the NBFC around May-June."

About the total investment for the NBFC venture, Jainsaid it has to be decided after discussing the issue with theapex bank. "It has to be decided after we discuss it with theRBI. However, our initial estimate is around Rs 200 crore."

The NBFC, Jain said, is expected to help in bringingdown its receivables to Rs 1,000 crore from the present Rs1,300 crore. .

Initially, the company will start the NBFC business in Maharashtra, its stronghold, before going pan-India, Jainsaid.

The irrigation firm has also decided to transfer itssolar/renewable energy division into a wholly-ownedsubsidiary in the next financial year.

"Our solar energy business is expanding rapidly andthe revenue is expected to double in FY 11 to Rs 75 crore fromRs 38 crore in FY 10," Jain said.

Through this subsidiary, the company is planning tocreate an allied business, he added.

Shares of Jain Irrigation today closed at Rs 177.30,up 4.60 per cent, on the Bombay Stock Exchange.

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