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Transcript of JainIrrigation-060912
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7/30/2019 JainIrrigation-060912
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EdelweissResearchisalsoavailableonwww.edelresearch.com,
BloombergEDEL,ThomsonFirstCall,ReutersandFactset. EdelweissSecuritiesLimited
Jain
Irrigation
(JISL)
has
announced
fund
raising
of
~USD200mn
via
a
mix
of equity, FCCBs, and ECBs. The company expects to complete the
exercisewithin60dayspostapproval,withIFCcontributingasignificant
chunk of FCCBs. The fund raisingwill lead to deleveraging of balance
sheet and reduction in interest cost by ~INR8001,000mn; however, it
willalsoresultinequitydilutionof~17.3%.MaintainBUY.
Event:JISLhasannouncedfundraisingofapproximatelyUSD200mnbywayof:
50.63mn equity shares on preferential issue for an amount of USD73mn(INR4,050mn)atINR80/shareorSEBIprice,whicheverishigher.
FCCBofUSD55mn(INR3,055mn). Broadtermsofconvertiblebondare: ConversionpricewillbeINR115/shareduringtheperiodoffiveyears. FCCBwillcarryacouponof3%p.a.andYTMof6%. FCCBswillberepaidinonetrancheafterfiveyears,ifnotalreadyconverted.
LIBORlinkedECBuptoanamountofUSD75mn(INR4,165mn)withatenorof610years.
Issue of 7.5mn warrants (1.85% of current O/S shares) to promoters of JISL @INR86.5/share(averageof26weeks).
InternationalFinanceCorporation(IFC)iscontributingsignificantlytotheFCCBs,apart
from participating in equity/ECB. Part of equity funds are being raised from private
equity
firm
Mount
Kellett;
ECBs
will
come
from
a
combination
of
European
Global
DevelopmentFinancialInstitutionsandRaboBank.
Impact:Positiveforbalancesheet,thoughwithequitydilution
JISL expects annualised savings on interest to be in the INR8001,000mn range,
resulting in better bottom line and gearing (current D/E at 2.2x). However, this will
lead to equity dilution of 12.6% (w/o considering FCCB conversion) and 17.3% (with
FCCBconversion).JISLstatedthatthisfundraisingwillprovidecrucialsupportduring
thecurrentphaseofbusinessmodelchange.Italsoaddedthatreceiptofgovernment
subsidies has gained momentum and the company expects to have significantly
improvedpositioninremainingpartofFY13.MaintainBUY.
FLASHNOTE
JAINIRRIGATIONToundertakefundraisingexercise
EDELWEISS RATINGS
AbsoluteRating BUY
InvestmentCharacteristics Growth
MARKETDATA(R:JAIR.BO,B: JIIN)CMP : INR64
TargetPrice : INR97
52weekrange(INR) : 183/60
Shareinissue(mn) : 385.9
Mcap(INRbn/USDmn) : 25/446
Avg.DailyVol.BSE/NSE(000) : 3,365.8
SHAREHOLDINGPATTERN(%)
Current Q4FY12 Q3FY12
Promoters% 31.0 30.4 30.4
MF's,FI's& 0.7 1.0 1.0
FII's 50.5 53.0 55.4
others 17.8 15.7 13.3
*Promoterspledgedshares(%ofshareinissue) : 15.2%
PRICEPERFORMANCE(%)
BSEMidcap
IndexStock
Stockover
Index
1month (1.3) (19.5) (18.3)
3months 2.9 (9.2) (12.1)
12months (5.7) (60.3) (54.6)
ManojBahety,
CFA
+912266233362
VarunGuntupalli
+912266233481
IdiaMidcps
IndiaEquityResearch|Miscellaneous
September5,2012
FLASH
Financials(Consolidated)*YeartoMarch FY11 FY12E FY13E FY14ENetrevenues (INRmn) 41,634 49,329 53,478 61,193Revenuegrowth(%) 21.7 18.5 8.4 14.4EBITDA(INRmn) 7,585 9,330 9,772 10,760Adj.profit(INRmn) 2,625 3,045 3,111 3,778DilutedEPS(INR) 6.5 7.5 7.7 9.3P/E(x) 12.2 10.5 10.3 8.5ROAE(%) 19.2 18.8 16.2 16.5
*Predilutivebasis
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