Nilachal Refractories Limited faces a significant corporate development as SFAL Speciality Alloys Limited has formally launched an open offer to acquire equity shares from public shareholders. The comprehensive offer, structured under SEBI Takeover Regulations, aims to facilitate voluntary delisting of the refractories manufacturer from stock exchanges.

Open Offer Details and Structure

SFAL Speciality Alloys Limited has announced a composite open offer cum delisting proposal targeting public shareholders of Nilachal Refractories Limited. The offer seeks to acquire up to 59,83,928 equity shares representing 29.39% of the total paid-up equity and voting share capital.

Share Purchase Agreement and Acquisition Strategy

The open offer follows a Share Purchase Agreement dated March 11, 2026, between SFAL Speciality Alloys Limited and existing promoters. Under this agreement, SFAL will acquire 1,43,77,522 equity shares constituting 70.61% of the issued and paid-up share capital at ₹20.00 per share, totaling ₹28,75,50,440.

Regulatory Framework and Compliance

The offer operates under a dual regulatory framework combining SEBI Substantial Acquisition of Shares and Takeovers Regulations with SEBI Delisting Regulations. Narnolia Financial Services Limited serves as the manager to the offer, while S K Infosolutions Private Limited acts as the registrar.

The delisting proposal requires specific regulatory approvals including valid shareholder resolution approving delisting through the offer and in-principle approval from stock exchanges. BSE Limited has been designated as the primary stock exchange for tendering shares through the acquisition window mechanism.

Financial Arrangements and Escrow Provisions

SFAL Speciality Alloys Limited has established comprehensive financial arrangements to support the offer. The company has deposited ₹13,16,46,416 in an escrow account with Axis Bank Limited, representing 100% of the maximum consideration payable assuming full acceptance.

Delisting Success Criteria and Alternative Scenarios

The delisting offer will be deemed successful if SFAL's post-offer shareholding reaches 90% of the voting share capital. If the delisting fails, SFAL will complete an open offer acquiring up to 39,47,782 equity shares at the base price of ₹20.00 per share, with public shareholders receiving a withdrawal window of five working days.

The offer provides an exit opportunity for public shareholders while enabling SFAL to gain operational and financial flexibility through potential full ownership of the target company.

SFAL Specialty Alloys Limited has published its detailed public statement for the mandatory open offer to acquire equity shares of Nilachal Refractories Limited, providing comprehensive details about the acquisition structure, timeline, and delisting intentions.

Open Offer Structure and Pricing

The open offer comprises a composite structure designed to facilitate both acquisition and potential delisting of the target company:

The offer price of ₹22.00 per share includes a premium of ₹2.00 over the base Share Purchase Agreement price of ₹20.00, reflecting SFAL's commitment to the delisting process. The equity shares are classified as infrequently traded under SEBI regulations.

Underlying Share Purchase Agreement

The mandatory open offer was triggered by SFAL's execution of a Share Purchase Agreement on March 11, 2026, with multiple sellers from Nilachal Refractories' existing promoter and promoter group:

The acquisition exceeds the threshold limit under Regulation 3(1) of SEBI SAST Regulations and will result in SFAL acquiring control over Nilachal Refractories, triggering mandatory open offer obligations.

Key Timeline and Process

The detailed public statement outlines the complete timeline for the open offer process:

The offer will be implemented through BSE Limited's stock exchange mechanism via a separate acquisition window, with AUM Capital Market Private Limited appointed as the buying broker.

Delisting Intention and Rationale

SFAL has expressed clear intention to delist Nilachal Refractories from BSE Limited pursuant to Regulation 5A of SEBI SAST Regulations. The delisting rationale includes providing immediate liquidity to public shareholders, enabling enhanced operational flexibility, reducing listing compliance requirements, and facilitating corporate restructuring initiatives.

Company Financial Position

The target company's recent financial performance shows challenges, with the latest eleven-month period ending February 28, 2026, recording total income of ₹197.16 lakhs and a loss after tax of ₹47.15 lakhs. The company's net worth stands at negative ₹3,265.06 lakhs, indicating significant financial stress.

Management and Compliance

Narnolia Financial Services Limited serves as the manager to the open offer, with S K Infosolutions Private Limited appointed as the registrar. SFAL confirms it had no prior shareholding in Nilachal Refractories and was not associated with the promoter group during the preceding two years. The acquirer has deposited ₹13,16,46,416 in an escrow account, representing 100% of the maximum consideration payable under the offer.