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Jain Irrigation to hive off food unit

By Debjyoti Roy

  • 25 Aug 2015
Jain Irrigation to hive off food unit
VCCircle_Fresh_Foods

India's largest micro irrigation firm Jain Irrigation Systems Ltd is hiving off its food business to a wholly owned subsidiary Jain Farm Fresh Foods Ltd in what could be a precursor to independent fundraising or a sale of the unit.

VCCircle had first reported in March 2014 that the firm is looking to bring in external investors for the food business.

The Jalgaon-based company, which is backed by World Bank's private investment arm IFC, said it has taken the decision to create a strategic focus on the fast-growing food business and consequent value creation opportunities.

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The food business of the company comprises food manufacturing units at Jalgaon (Maharashtra), Vadodara (Gujarat) and Chittoor (Andhra Pradesh) besides the indirect subsidiaries carrying on food business activities namely: SQF2009 Ltd UK and Cascade Specialities Inc, the US.

Jain Irrigation is one of the largest players in the agro-industrial business controlling a large chunk of the irrigation market, particularly in micro and drip irrigation segment.

Early this year, its agri-NBFC subsidiary Sustainable Agro-commercial Finance Ltd (SAFL) raised Rs 112 crore ($17.9 million) from Mandala Capital, which invests in agri-focused companies in India.

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Mandala Capital holds 20 per cent stake in SAFL, which also counts IFC as another investor.

Founded in 2011, Mumbai-based SAFL provides loans to small-scale farmers to help them install micro-irrigation systems and improve productivity. The company has so far served over 15,000 farmers since its inception.

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