Jalgaon-based Jain Irrigation Systems (JISL) plans to set up a non-banking finance company (NBFC) to finance farmers’ needs, said managing director Anil B Jain.
Jalgaon-based Jain Irrigation Systems (JISL) plans to set up a non-banking finance company (NBFC) to finance farmers’ needs, said managing director Anil B Jain.
The company’s board has already approved the move and will apply for a nod from the Reserve Bank of India for the same this quarter.
“It normally takes 3-4 months for the approval to come through,” said Jain.
JISL is hoping that the NBFC will help boost its sales. “Farmers need timely and adequate credit which the NBFC can provide and it can also improve JISL’s balance sheet by reducing debtors,” he added. To begin with, the company will finance just the purchase of it own products.
JISL, the world’s second largest micro irrigation systems (MIS) maker after Israel’s Netafim, and India’s biggest, currently aids farmers in sourcing credit to buy its products. There are also government subsidy schemes for the same.
Jain said the company also plans to raise by June Rs700 crore through a qualified institutional placement (QIP). “It will partly go into capital infusion for the NBFC and partly reduce our working capital debt,” Jain said.
The JISL board also on Friday approved the hiving-off of its solar division, under which it makes solar lanterns, solar water heaters and, lately, solar water pumps.
For the three months ended December 31, JISL saw its net sales grow by less than 10% to Rs693 crore while its net profit rose 24.6% to Rs71.47 crore.
Jain said the heavy and unseasonal rains dented the topline. “In the first nine months, our irrigation business grew by 27% while we expected a growth of 30%. But the current quarter is better,” he said. JISL has an order backlog of Rs1,100 crore, most of which is in drip irrigation.
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