Grasim sells fertiliser business to Indorama for ₹2,649 crore2 min read . Updated: 12 Nov 2020, 05:34 PM IST
- Grasim reported consolidated net profit of ₹1,518 crore in Q2FY21, with revenue at ₹18,400 crore. Consolidated EBITDA for Q2FY21 was at ₹3,660 crore, up 15% YoY
MUMBAI: Grasim Industries has divested its entire stake in its fertiliser business--Indo Gulf Fertilisers (IGF)--to Singapore-based Indorama Corporation Pte Ltd in a slump sale, the company said in a press release. Grasim will receive a cash consideration of ₹2,649 crore.
IGF is engaged in manufacturing, trading, and sale of urea and other agri-inputs with a 1.2 million tonnes per annum urea manufacturing plant at Jagdishpur in Uttar Pradesh. Indorama India Pvt Ltd, a subsidiary of the Singapore entity, will take control of the India business.
"The divestment of the fertiliser business by Grasim is a strategic portfolio choice and unlocks value for the shareholders. It is in line with the strategic thrust of the company to focus on core businesses," Dilip Gaur, MD, Grasim Industries Ltd, said. “Indo Gulf Fertilisers is synonymous with strong performance and high sustainability standards. To take it to the next level in size and value, the company is pleased to have found in Indorama Corporation, a credible fertiliser player to own IGF. IGF will benefit from synergies and expertise of Indorama Corporation’s existing agri portfolio."
The transaction is subject to necessary statutory and regulatory approvals including approvals of the NCLT, stock exchanges, Securities and Exchange Board of India, Competition Commission of India, respective shareholders and lenders /creditors to the companies.
Amit Lohia, vice-chairman, Indorama Corporation, said, “We are pleased that with this acquisition, Shaktiman and the Paras brands will be able to join hands to offer a complete range of products for our farmers including urea, phosphate fertilisers, potash, soil health products, seeds, and crop protection products. We are excited about this union and believe it will facilitate greater access and development of high quality agri inputs for the farming community."
Grasim reported consolidated net profit of ₹1,518 crore in Q2FY21, with revenue at ₹18,400 crore. Consolidated EBITDA for Q2FY21 was at ₹3,660 crore, up 15% year-on-year.
The company said its viscose business has been on the recovery path since the end of Q1FY21 with operating rates rising month-on-month. Capacity utilisation of the VSF (viscose staple fire) business touched 88% in Q2FY21 from 26% in Q1FY21and recorded near 100% capacity utilisation at the end of Q2.
In the chemicals vertical, demand for chlorine derivative products remained strong, driven by higher sales of hygiene products and disinfectants, organic intermediates, and agrochemicals. Caustic soda production staged a strong recovery in volumes during the quarter, and capacity utilisation improved to 80% in Q2FY21 from 49% in Q1FY21, with end use industries witnessing demand recovery.