Japan's Itoh Oil Chemicals (ITOH) is picking up a 4.8% stake in Mumbai-based Jayant Agro Organics (JAOL), a leader in castor oil and castor derivatives. India produces nearly 70% of the world consumption of castor oil.
Jayant Agro, an Udeshi group company, produces castor oil worth Rs 450 crore a year. Castor oil is used in industrial manufacturing the world-over as a value addition material.
The board of Jayant Agro last week approved the issue of 6 lakh shares (4.76%) to the Japanese company for Rs 105 each. The total investment by ITOH, a leading manufacturer of castor oil derivatives in Japan, would amount to over Rs 6.3 crore.
JAOL also plans to allot 1.3 million warrants to promoters at Rs 105. The board has also approved the issue of overseas convertible bonds for up to $20 million.
The infusion of funds will be used for further expansion and setting up of new projects for higher value added derivatives. The company has already undertaken expansion of its crushing unit by 100% and its derivative unit by 25%.
Both the expansions have been completed during the year. The company plans to expand its existing crushing and derivatives facilities by 50% and 25%, respectively. Both these expansions are expected to be completed in the next six months.
This is the second foreign direct investment (FDI) in the group within a month. Mitsui Group of Japan has picked up 24% stake in JAOL’s subsidiary Ihsedu speciality & Chemicals (ISCL). ISCL is currently setting up a chemical manufacturing unit for manufacturing speciality chemicals based on castor oil.
Source: Economic Times