Astral Limited ’s board has approved a composite scheme of arrangement to demerge its chemicals business into Astral Chemie Limited and amalgamate Al-Aziz Plastics Private Limited with itself, aiming to unlock value through focused management. The reorganisation will segregate the company’s plumbing and chemicals verticals, allowing each entity to pursue independent capital allocation and growth strategies. Shareholders of Astral Limited will receive one equity share of Astral Chemie Limited for every share held, while the amalgamation of Al-Aziz Plastics will result in the dissolution of the transferor company without any share issuance.

Scheme Details and Approvals

The board meeting, held on June 25, 2026, sanctioned the scheme under Sections 230 to 233 of the Companies Act, 2013. The chemicals business undertaking, along with related assets and liabilities, will be transferred to Astral Chemie Limited on a going concern basis. Concurrently, Al-Aziz Plastics Private Limited will be amalgamated into Astral Limited. The scheme is subject to approvals from the National Company Law Tribunal, Ahmedabad Bench, Securities and Exchange Board of India (SEBI), and stock exchanges.

Financial Metrics and Shareholding

The turnover of the demerged chemicals undertaking for the year ended March 31, 2026, was ₹12,663 million, accounting for 21% of Astral Limited’s total turnover. The standalone financials for the year ended March 31, 2026, show Astral Limited’s total turnover at ₹59,076 million and net worth at ₹41,058 million. Al-Aziz Plastics Private Limited reported a turnover of ₹373 million and a net worth of ₹215 million for the same period.

Post-scheme, the shareholding pattern of Astral Chemie Limited will mirror that of Astral Limited, with promoters holding 54.22% and the public holding 45.78%. There will be no change in the shareholding pattern of Astral Limited following the amalgamation. The equity shares of Astral Chemie Limited are proposed to be listed on the National Stock Exchange of India Limited and BSE Limited.

Strategic Rationale

The demerger is intended to consolidate the chemicals business, including adhesives, sealants, and construction chemicals, with the existing paints and coatings business of Astral Chemie Limited. This move aims to achieve operational efficiencies, cost optimization, and specialized management. The amalgamation of Al-Aziz Plastics is designed to integrate complementary product lines, reduce administrative overheads, and leverage synergies in manufacturing and supply chain within the plumbing business vertical.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE006I01046/ed663e50f07a43cc.pdf

Astral Limited 's wholly owned subsidiary, Astral Chemie Limited, has entered into definitive agreements to acquire a 60% partnership interest in Differentiated and Sustainable Solutions LLP (DSS) for an aggregate consideration of ₹39.11 crore. The transaction, expected to be completed on or before August 31, 2026, will make DSS a subsidiary of Astral Chemie Limited and a step-down subsidiary of Astral Limited. This strategic move is aimed at strengthening Astral's backward integration in key raw materials and expanding its footprint in the specialty chemicals segment.

Analyst View

Investec has maintained a Buy rating on Astral Ltd with a target price of ₹1,710, citing the acquisition of a 60% stake in DSS — a specialty chemicals and advanced materials company — as a strategic move to deepen backward integration, drive cost efficiencies, and create a scalable new growth vertical. The brokerage also highlighted upside risks to estimates stemming from CPVC integration benefits and DSS expansion potential, though it noted that revenue ramp-up visibility remains awaited.

Acquisition Overview

The acquisition involves a cash consideration of ₹39.11 crore for a 60% stake in DSS, an entity incorporated on December 28, 2015. DSS is engaged in developing technologies for specialty chemicals and materials used in electronics, aerospace, renewable energies, and infrastructure. The deal is not a related party transaction and does not require specific governmental or regulatory approvals.

Financials and Operations

DSS operates a manufacturing facility at E-7, Vilayat GIDC, Dist. Bharuch-392012, Gujarat, with an annual capacity of 5,200 M.T. The company has reported the following turnover figures over the past three years:

Strategic Rationale

The acquisition aligns with Astral's strategy of investing in technology-led capabilities. DSS is noted for being the only entity in India possessing technology to produce a wide range of Polyamines and unique Bismaleimides and Benzoxazines. These products are critical for the adhesives, paints, and construction chemicals sectors. By integrating DSS, Astral aims to leverage these proprietary technologies to enhance its research and development capabilities and facilitate entry into high-value B2B markets such as electronics and aerospace.

Management Commentary

Commenting on the development, Mr. Saumya Engineer, CEO - Adhesives and Paints Business of Astral Limited, stated that the acquisition will strengthen the company's technology platform and deepen backward integration across critical specialty chemistries. He highlighted that the addition of advanced specialty chemicals would enable greater innovation across adhesives, paints, and construction chemicals while reinforcing resilience across the value chain.