UPL, Aarti Industries form joint venture for manufacturing of specialty chemicals

24 May 2024 , 01:30 PM

Share prices of UPL and Aarti Industries increased in early trade on May 24 following the announcement of their joint venture agreement to manufacture specialty chemicals.

At the time of writing, the stocks were trading at Rs 630 which is a 0.49% surge than the previous close, and shares of UPL were trading at Rs 518.90 which is a 1.59% apiece.

On May 23, UPL announced a 50-50 joint venture with Aarti Industries to produce and market specialty chemicals for various downstream industries.

This collaboration represents a significant partnership between two major Indian companies, aiming to develop, manufacture, and market value-added chemical intermediates for global markets, supporting India’s ambitions of self-reliance and global manufacturing leadership.

Both companies will supply essential raw materials needed for the production of these targeted chemicals.

The joint venture is expected to commence commercial supplies by the first quarter of FY27, with an anticipated peak annual revenue potential of ₹400-500 Crore within the next 2-3 years. The joint venture will operate under the proposed entity Augene Chemical Private Limited (ACPL).

Both UPL and Aarti Industries will initially invest ₹12.50 Crore each in ACPL’s equity share capital. Over the next 24 months, they plan to invest an additional ₹137.50 Crore each, in one or more tranches, through equity capital, preference share capital, or debt.

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