Deepak nitrite Limited has informed stock exchanges about a significant GST order against its wholly owned subsidiary Deepak Phenolics Limited (DPL). The disclosure, made under Regulation 30 of SEBI Listing Regulations on April 1, 2026, relates to an appellate order passed by GST authorities in Vadodara, Gujarat.

GST Order Details

The Commissioner (Appeal), CGST & Central Excise (Appeals), Vadodara, Gujarat passed an order dated March 6, 2026, which was downloaded from the GST portal on March 31, 2026. The order represents an adverse outcome for DPL's appeal against an earlier GST demand.

Financial Impact

The GST authorities have upheld significant financial demands against Deepak Phenolics Limited. The order covers both tax recovery and penalty components under the CGST Act, 2017 and GGST Act, 2017.

The recovery amount is subject to applicable interest under Section 74(1) read with Section 50(3) of the respective GST Acts, while the penalty has been imposed under Section 74(1) of the GST legislation.

Company's Position and Next Steps

Deepak Phenolics Limited maintains its position regarding the legitimacy of the input tax credit availed. The company has stated that it availed input tax credit in accordance with the applicable provisions of GST Laws and disputes the allegations of contraventions.

The subsidiary plans to pursue all appropriate legal remedies available under the GST framework. This includes filing an appeal against the appellate order before the relevant higher appellate authority as prescribed under GST Law.

Regulatory Compliance

This disclosure follows an earlier communication dated October 9, 2025, indicating that this matter has been under consideration for several months. The company has fulfilled its obligations under Regulation 30 read with Para-A-20 of Part A of Schedule III of the SEBI Listing Regulations by providing comprehensive details of the order.

According to the disclosure, there will be no material financial impact on the listed entity except to the extent of the amounts mentioned in the GST order. The matter specifically relates to the subsidiary's operations and does not directly impact the parent company's core business activities.

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.