Intraday Spotlight: Jain Irrigation soars 11 per cent; heres why!

Company plans to merge its international business to reduce debt.

Jain Irrigation Systems Ltd (JISL), engaged in the manufacturing of irrigation systems, PVC pipes and allied agriculture products has jumped over 11 per cent today from its previous close of Rs 37.50 as the company announces merger of its international irrigation business with Temasek owned-Rivulis. The company aims to significantly deleverage its books, as the proceeds of Rs 2,664 crore will be used to pay off about 45% of its debt.     

The stock opened at Rs 42 and has made its day high of Rs (+17 per cent). As of 12 pm today, the stock was trading near Rs 41.50 on the BSE. This company is the leading gainer in group A on the BSE. This transaction from Jain Irrigation is its second move to reduce its debt. Its current debt-to-equity ratio is at around 1.84 times. Should it pay off by Rs 2,664 crore, the same ratio will be down to 1.11 times. Post-merger, Jain Irrigation will hold about 22 per cent stake in the merged entity, while the rest will be held by Temasek.    

For the quarter ended March, the company reported a jump of 355 per cent in profitability and a growth of 16.16 per cent in revenues on a YoY basis.   

JISL, its subsidiaries and associates are engaged in providing solutions in the agriculture, water and food sector through the manufacturing of Micro Irrigation Systems, PVC Pipes, HDPE Pipes, Plastic Sheets, Agro Processed Products and other agricultural inputs for more than 34 years.    

The stock has a 52-week high and low of Rs 53.50 and Rs 24.80, respectively.