Jain Irrigation soars ~13% on merger of global irrigation business with Rivulis

22 Jun 2022 , 02:40 PM

Jain Irrigation Systems Limited informed that its global irrigation business will be merged with Rivulis, Temasek’s significant arm, in a cash and stock deal.

This move has been taken by the company in order to reduce its consolidated debt by Rs2,700 crore, aggregating about 45%.

Post this development, Jain Irrigation’s counter flourished with nearly 13% gains in today’s trade.

At around 2.33 PM, Jain Irrigation’s scrip was trading at Rs42.55, up by 13.47% against its previous close of Rs37.50 on the National Stock Exchange. So far in the day, it touched an intraday high of Rs43.80.

According to Jain Irrigation’s managing director, Anil Jain, the company’s global irrigation business is worth Rs4,200 crore, of which Rs2,700 crore would be utilized to pay off its debt to other countries and Rs200 crore will go to the parent company.

Jain Irrigation will hold a 22% ownership investment in the combined company, whereas, Rivulis would hold a 78% stake. According to Jain, the transaction will probably be completed within the next six months, and the combined company has the potential to generate $750 million in revenue.

Jain International Trading, a fully owned subsidiary of Jain Irrigation Systems, and Rivulis have signed binding transaction agreements. The irrigation industry would grow to be the second-largest in the world.