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The board of home appliances major IFB Industries has approved an investment of Rs 97 crore in the equity issue of promoter group company IFB Refrigeration Limited (IRL) for a minority stake.

The investment will be made in two tranches, post which, the promoter entity will issue 9.7 lakh shares to the company.

IFB Industries did not disclose the equity stake it will be acquiring through the investment but mentioned that in any eventuality, its shareholding in IRL shall be below 50 percent.

The investment is proposed to be made at par and on an Arm's Length basis, the filing stated. The transaction is likely to be completed by March 2023.

Promoters of IFB Industries incorporated IRL in March 2021 for the manufacture, assembly, fabrication, design and maintenance of refrigerators and compressors for domestic and industrial usage.

IRL is setting up its manufacturing facility at Ranjangaon Industrial Area at Shirur (Pune) in Maharashtra. It looks to start commercial production in April 2023.

IFB Industries said that it keeps evaluating proposals for equity investment in diverse businesses as an alternative to investment in debt mutual funds. Further IRL, has an experienced project and manufacturing team in place.

Home appliances business contributes a majority of revenue for IFB Industries.

For the September quarter, the company's revenue rose by 14 percent Year-on-Year to Rs 1,097 crore while net profit was flat at Rs 24 crore.

Shares of IFB Industries gained as much as 4 percent in early trading before giving all of it up. The stock is trading 0.3 percent higher at Rs 992.95.