Jain Irrigation mulls divesting pipes business

In a bid to reduce its debt, micro-irrigation company Jain Irrigation is planning to divest from its pipes or food business. Reacting to this development, the stock of Jain Irrigation dipped 13 per cent on Monday.

The company's Q4 earning presentation stated that it plans to bring down the debt of the company and its subsidiaries over a period of 12 to 24 months by at least Rs. 20 billion. The company will employ a mix of corporate actions including demerger, divestment and equity infusion in three businesses in India and aboard.

The stock was buzzing on Monday following a statement by the company's top management official to a news outlet that it seek to either divest its pipes or food business. Jain irrigation seek a valuations of around Rs. 3,500 crore for its pipes business. The official, however, said that no immediate payment is pending or default has occurred on the part of the company.

For Q4FY19, the consolidated revenue of Jain Irrigation dipped by 5.99 per cent to Rs. 25,831 million on YoY basis. Revenue decreased by 13.88 per cent to Rs. 13,346 million and EBIDTA was up by 1.16 per cent at Rs. 4,364 million. The company's consolidated PAT dipped by 39.37 per cent to Rs. 562 million in Q4FY19. For the full year, consolidated revenue grew by 8.63 per cent to Rs. 85,769 million in FY19 as against Rs. 78,955 million in FY18.

On Monday, the stock of Jain Irrigation closed at Rs. 37.35 per share, down by 13.24 per cent on BSE. The stock's lower circuit limit for the day was placed at 15 per cent.