Shares in Jain Irrigation traded lower on the bourses Wednesday over concerns of equity dilution. Asia's biggest irrigation-equipment maker's share prices have fallen 25 per cent over the last month on account of a weak June quarter and a series of block deals.
Jain Irrigation's board has approved fund raising of $200 million via a mix of debt and equity. The company will raise $ 73 million (Rs 405 crore) via preferential allotment (at Rs 80 per share), another $55 million (Rs 305 crore) through Foreign Currency Convertible Bonds (FCCBs), and $75 million (Rs 416.5 crore) via External Commercial Borrowings (ECB) Libor. This will have a tenor of 6-10 years. The borrowing programme will be completed once all the approvals are in place as per ECB regulations.
The ECB shall have a tenor of 6-10 years, the company said in a statement to the exchange.
The FCCBs conversion has been fixed at a price of Rs 115 per equity share at any time during the period of 5 years, Jain Irrigation said in a statement to the BSE.
The FCCB shall have a coupon of 3 per cent per annum and yield to maturity of 6 per cent, the company said. The FCCB's will be repaid in one tranche after 5 years, if not already converted into equity shares, Jain Irrigation said.
Anil Jain, MD of Jain Irrigation Systems told NDTV Profit that the conversion will lead to 5-6 per cent equity dilution.
At 12.27 p.m., the stock traded 3 per cent lower at Rs 62.35 on the NSE, while the Nifty was down 1 per cent at 5,221.
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