International Finance Corporation (IFC), the private-sector investment arm of the World Bank, is planning to support JK Paper Limited's (JKPL's) working capital requirements. It plans to do so by infusing $35 million (Rs 263 crore) in the company. The infusion will help the company address liquidity constraints amid the coronavirus crisis.
IFC said in a statement that it will invest by subscribing to secured non-convertible debentures (NCDs) of the Singhania Group company. The NCDs are up to Rs 2.6 billion ($35 million equivalent).
JK Paper is India's producer of office papers, printing, writing and specialty papers, and packaging boards. In 2018, IFC had invested $45 million in the form of NCDs in JK Paper to help the company increase productivity at its two plants in Odisha and Gujarat, and to refinance existing debt. The company is publicly listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The New Delhi headquartered company will primarily use the IFC funds to meet its incremental working capital requirements and a shortfall in cash flow generation to fund planned and future capital expenditures.
In 2018, IFC had disbursed $44.7 million in the form of an INR denominated A loan (category description) to the company to help improve its productivity and refinance its existing debt.
The company is a part of the JK Organisation group of companies that is run by the Singhania family of India. The Singhania family has a legacy of over 130 years and runs the well-respected JK Organisation which was established in 1888. The promoter group together owns 48.9 per cent of the company, while the public owns 51.1 per cent.
The investment of IFC in JK Papers is the latest example of the Washington-headquartered IFC’s commitment to India, which is its single-largest portfolio market. Apart from its direct investments that involve both equity and debt funding, the institution also actively invests PE and VC funds.
The latest IFCs bets include a debt investment of around Rs 756 crore to NBFC firm Fullerton India Credit Company Ltd (FICCL), owned by Singapore state investment firm Temasek, last week.
$54 million (around Rs 397 crore) in debt to poultry company Suguna Group, in March.
Investment of nearly $30 million in private equity-backed Future Lifestyle Fashions, in February.
In October last year, it said that it was planning to make an equity investment of up to $20 million (around Rs 141.82 crore then) in the overseas unit of agricultural producer Maharashtra Hybrid Seed Company (Mahyco India).
It also took part in B2B marketplace Bizongo’s Series C funding round, which saw the startup valued at nearly $100 million. In the same month, the firm said it would provide $150 million in the form of a five-year senior loan to private-sector lender RBL Bank, in July.