Deepak Nitrite Limited has announced a substantial investment of ₹135 crores in its wholly owned subsidiary Deepak Chem Tech Limited (DCTL) through the issuance of 9% Optionally Convertible Redeemable Preference Shares (OCRPS). The transaction was completed on March 26, 2026, and disclosed under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Investment Structure and Details

The capital infusion involves two separate allotments of OCRPS by DCTL. The investment structure demonstrates a coordinated approach between Deepak Nitrite Limited and its subsidiary entities to strengthen DCTL's financial position.

OCRPS Allocation Breakdown

DCTL issued a total of 1,35,00,000 OCRPS with specific allocations to each investing entity. Deepak Phenolics Limited, another wholly owned subsidiary of Deepak Nitrite Limited, received 1,10,00,000 OCRPS aggregating to ₹110 crores. Simultaneously, Deepak Nitrite Limited directly acquired 25,00,000 OCRPS worth ₹25 crores.

About Deepak Chem Tech Limited

DCTL, incorporated on October 9, 2020, operates specialized chemical manufacturing facilities across Gujarat. The company's current operations include plants for Fluorination, Nitric Acid, Nitration and Hydrogenation processes. Prior to this investment, DCTL maintained a paid-up capital of ₹2099.50 crores, comprising ₹499.50 crores in equity shares and ₹1600 crores in preference shares.

Transaction Compliance and Structure

The investment qualifies as a Related Party Transaction since both DCTL and Deepak Phenolics Limited are wholly owned subsidiaries of Deepak Nitrite Limited. However, the company confirmed that both transactions were conducted on an arms-length basis with OCRPS issued at par value of ₹100 each. The investment required no governmental or regulatory approvals and was completed through cash consideration via normal banking channels.

Strategic Objectives

The primary objective of this capital infusion is to strengthen DCTL's capital base and provide financial support for project expenses and general corporate purposes. The business activities of DCTL align with the main line of business of the listed entity, ensuring strategic coherence within the group structure. Following this investment, Deepak Nitrite Limited continues to maintain 100% control of DCTL's equity share capital, while collectively holding 100% of the preference share capital along with Deepak Phenolics Limited.

Deepak nitrite Limited has informed stock exchanges about receiving a GST order from tax authorities in Vadodara, Gujarat, demanding recovery of ₹60.46 lakh including tax, interest, and penalty components. The company disclosed this development under regulatory compliance requirements on March 25, 2026.

GST Order Details

The Assistant Commissioner of State Tax, Unit-40, Vadodara, Gujarat passed the order dated March 7, 2026, which was received by the company on March 25, 2026. The order was issued under the Gujarat Goods and Service Tax Act, 2017, targeting alleged violations related to Input Tax Credit claims.

Nature of Alleged Violation

The GST authorities have raised demand for allegedly ineligible Input Tax Credit (ITC) claimed by the company for Financial Year 2019-20. The order challenges the company's ITC claims during that period, suggesting non-compliance with GST regulations.

Company's Response and Position

Deepak Nitrite has maintained its position that the Input Tax Credit was availed after following due process of law and complying with conditions set out under GST legislation. The company believes its ITC claims were legitimate and in accordance with regulatory requirements.

The company has indicated it is in the process of taking appropriate legal course of action against the said order. This legal challenge will target the recovery of tax, levy of interest, and penalty components imposed by the tax authorities.

Financial Impact Assessment

According to the company's disclosure, there will be no material financial impact except to the extent of the amounts mentioned in the GST order. The total demand of ₹60.46 lakh represents the quantifiable monetary impact on the company's operations at this stage.

The company has fulfilled its disclosure obligations under Regulation 30 of SEBI Listing Regulations, providing detailed information about the tax authority's action and the company's planned response to stakeholders.