Primo Chemicals board of directors has approved the draft scheme of amalgamation of its wholly owned subsidiary, Flow Tech Chemicals Private Limited, with itself. The proposed merger aims to streamline operations and consolidate resources.

The Board meeting held on September 25, 2026, sanctioned the scheme under Sections 230-232 of the Companies Act, 2013. The appointed date for the amalgamation is October 1, 2026. This action requires final sanction from the National Company Law Tribunal (NCLT) and other relevant regulatory authorities.

Financial Snapshot

The merger involves two entities within the same corporate group. Flow Tech is a wholly owned subsidiary of Primo Chemicals. The financial details for the fiscal year ended March 31, 2026, highlight the relative scale of both entities.

Strategic Rationale

The company cited several benefits driving the consolidation. Key objectives include:

• Simplification of the overall group structure by integrating Flow Tech’s operations directly within Primo.
• Reduction in management overlaps and multiplicity of legal and regulatory compliances.
• More efficient utilization of capital and creation of a consolidated asset base for future growth.
• Synergy benefits through pooling of proprietary information, personnel, and financial resources.

Transaction Mechanics

The scheme does not involve any cash consideration or share exchange ratio. Since Flow Tech is a wholly owned subsidiary, no new equity shares will be issued by Primo Chemicals to Flow Tech shareholders. Consequently, the pre and post-amalgamation shareholding pattern of the listed entity will remain unchanged.

Although the transaction falls within the purview of related party transactions due to the ownership structure, the company stated it will not fall under Section 188 of the Companies Act, 2013, regarding related party transaction restrictions.

What the Numbers Show

Flow Tech contributes approximately 61% of Primo Chemicals' standalone turnover but only 23% of its EBITDA. This disparity suggests that while Flow Tech adds significant volume to the top line, its margins are lower than the parent company's. Consolidating these entities may allow for better margin management by leveraging Primo's stronger profitability profile across a larger revenue base.

Primo Chemicals has completed the acquisition of the remaining 51% equity stake in Flow Tech Chemicals Private Limited, establishing it as a wholly owned subsidiary. The transaction was finalized on September 16, 2026.

The move follows shareholder approval obtained through a postal ballot on August 5, 2026. This step consolidates Primo’s control over Flow Tech, aligning with its earlier disclosure dated July 2, 2026.

Transaction Details

Primo executed the second Supplementary Share Purchase Agreement to acquire the balance stake from existing shareholders other than itself. The acquisition brings Flow Tech entirely under Primo’s ownership structure.

Regulatory Compliance

The disclosure is made pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Primo notified the stock exchanges of the completion of the acquisition.