What is wrong with Jain Irrigation?

Rating firms had downgraded the company due to delay in servicing debt. Last year, S&P had downgraded it to ‘D’ (default grade) for missing interest payments due on February 1, 2020. Similarly, Care Ratings had downgraded Jain Irrigation to ‘D’ in 2019 due to a delay in servicing debt.

Should I buy Jain Irrigation?

Based on the last year’s worth of payments, Jain Irrigation Systems stock has a trailing yield of around 5.2% on the current share price of ₹19.05. If you buy this business for its dividend, you should have an idea of whether Jain Irrigation Systems’s dividend is reliable and sustainable.

Why did Jain Irrigation fail?

The trouble for Jain Irrigation began after it reportedly failed to secure payments from the government despite executing irrigation projects based on government subsidies. The debt pile, liquidity issues and delay in servicing debt prompted rating firms to downgrade the company.

What is the future of Jain Irrigation?

Jain Irrigation will operate in 3 different segments / divisions in future and the interest cost will reduce from Rs 400 cr to Rs 200 cr. Sustainable debt for the company will happen at 9% and unsustainable debt will happen at 0% for a period of 8 years. This is the entire restructuring plan of the company.

Can Jain Irrigation emerge from this debt trap?

“We see Jain Irrigation as being caught in a debt trap, as working capital and interest payments have been eating into operating cash flows, leaving negligible amounts for debt repayments,” wrote Amit Murarka, an analyst with Deutsche Bank Research, after JISL announced quarterly results in May.

Is Jain Irrigation a multibagger?

Jain Irrigation slipped from its all-time highs of Rs 145.60 per share recorded in January 2018 to Rs 3.30 per share in March, 2020. The stock tanked almost 98 percent from its record highs.

Who is the owner of Jain Irrigation?

Bhavarlal Jain
Mr. Ashok Jain is the Chairman of Jain Irrigation Systems Limited and a well-known entrepreneur working for agriculture for the past over 4 decades. He is 56 years old and is the eldest son of Late Dr. Bhavarlal Jain, the Founder Chairman.