Jain Irrigation Systems rose 7.39% to Rs 106.80 at 13:52 IST on BSE after the company said it acquired 80% stake in two US-based entities.
The announcement was made during trading hours today, 19 April 2017.Meanwhile, the S&P BSE Sensex was down 7.64 points, or 0.03% to 29,311.46.
On the BSE, 27.13 lakh shares were traded in the counter so far, compared with average daily volumes of 4.56 lakh shares in the past one quarter. The stock had hit a high of Rs 109.55 and a low of Rs 99.60 so far during the day. The stock hit a 52-week high of Rs 109.55 on 19 April 2017. The stock hit a 52-week low of Rs 59.90 on 29 April 2016.
The stock had outperformed the market over the past one month till 18 April 2017, rising 4.25% compared with 0.68% decline in the Sensex. The scrip had, however, underperformed the market in past one quarter, rising 5.41% as against Sensex's 7.56% rise.
The mid-cap company has equity capital of Rs 92.03 crore. Face value per share is Rs 2.
Jain Irrigation Systems (JISL), through its US-based wholly owned subsidiary, agreed to acquire 80% stake in two US-based entities. Two of the United States' largest micro-irrigation dealers - Agri-Valley Irrigation, Inc. (AVI) and Irrigation Design and Construction, Inc. (IDC), have entered into an agreement to merge ownership of their businesses into a newly formed distribution company. The new organization is an un-paralleled leader in design, construction, service, and innovative Ag Technology. This entity will provide a unique platform to help growers implement state-of-the-art irrigation technology and achieve "More Crop Per Drop". AVI and IDC have been long tenured stable companies with operations in United States of America.
This is a key strategic investment by JISL into one of the largest irrigation markets in the world. JISL already has a presence in US micro irrigation market through its wholly owned subsidiary Jain Irrigation, Inc., (JIl) which is headquartered in Fresno, California. California drought has now eroded with significant rains over the last few months. Therefore, now there is strong irrigation business opportunity in the next 18-24 months for the merged distribution company as well as JIl.
The merger will help Jain Irrigation to forward integrate itself in the value chain and build direct relationship with growers. This fits into company's strategy to participate in end-to-end project solutions to harness company's unique capabilities in Integrated Irrigation project solutions. No government or regulatory approvals are required to complete the transaction. The transaction is expected to be completed in the next few weeks.
The consideration for transaction will be paid in cash not exceeding $48.50 million and subject to net working capital adjustments at the time of closing. Transaction is expected to be closed in the next few weeks.
On a consolidated basis, Jain Irrigation Systems reported net profit of Rs 6.15 crore in Q3 December 2016 compared with net loss of Rs 23.01 crore in Q3 December 2015. Net sales rose 4.5% to Rs 1417.82 crore in Q3 December 2016 over Q3 December 2015.
Jain Irrigation Systems is engaged in manufacturing of micro irrigation systems, PVC pipes, HDPE pipes, plastic sheets, agro processed products, renewable energy solutions, tissue culture plants, financial services and other agricultural inputs.
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