Deepak Nitrite Limited (DNL), a prominent player in the chemical industry, has announced a significant financial transaction involving its wholly-owned subsidiary, Deepak Chem Tech Limited (DCTL). The subsidiary has issued Optionally Convertible Redeemable Preference Shares (OCRPS) valued at ₹500 million to the parent company, reinforcing DNL's commitment to strengthening its subsidiary's capital base and supporting ongoing project expenses.

Key Transaction Details

DCTL has issued and allotted 50,00,000 9% Optionally Convertible Redeemable Preference Shares (OCRPS) to Deepak Nitrite Limited. The OCRPS, each with a face value of ₹100, were issued at par, resulting in an aggregate investment of ₹500.00 million from the parent company.

Strategic Implications

This financial maneuver serves multiple purposes:

1. Capital Base Enhancement: The infusion of funds is aimed at bolstering DCTL's capital structure.
2. Project Support: The investment will aid DCTL in financing its ongoing and future project expenses.
3. Operational Expansion: As DCTL actively pursues projects across various sites in Gujarat, this capital injection is likely to fuel its growth initiatives.

About Deepak Chem Tech Limited

DCTL, incorporated on October 9, 2020, has been making strides in the chemical industry:

• Core Operations: The company operates a state-of-the-art fluorination plant, which has been functional since March 21, 2024.
• Financial Performance: DCTL reported a turnover of ₹9.43 crore.
• Ownership Structure: Post this transaction, Deepak Nitrite Limited continues to hold 100% of DCTL's equity share capital. Additionally, DNL, along with another wholly-owned subsidiary, Deepak Phenolics Limited (DPL), indirectly holds 100% of DCTL's preference share capital.

Transaction Compliance and Transparency

The transaction adheres to regulatory requirements:

• It falls under the Related Party Transaction (RPT) category, as DCTL is a wholly-owned subsidiary of Deepak Nitrite Limited.
• The allotment was made on an "arm's length" basis, ensuring fairness and transparency in the transaction.
• The company has duly informed the BSE Limited, complying with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This strategic move by Deepak Nitrite Limited reflects its confidence in DCTL's potential and its commitment to fostering growth within its group companies. As DCTL continues to expand its operations and pursue new projects, this financial backing is expected to play a crucial role in its developmental trajectory within the chemical industry.

Deepak Nitrite , a leading chemical manufacturing company, has announced the completion of a significant financial transaction involving its subsidiary, Deepak Phenolics. The company has successfully allocated preference shares worth ₹55.00 crore to Deepak Phenolics, marking a notable development in its corporate structure.

Transaction Details

The transaction involves the issuance of Optionally Convertible Redeemable Preference Shares (OCRPS) valued at ₹55.00 crore. Deepak Nitrite confirmed that this allocation has been finalized, indicating a strategic move to strengthen its relationship with its subsidiary.

Implications for Deepak Nitrite and Deepak Phenolics

This financial maneuver suggests a potential strengthening of ties between Deepak Nitrite and Deepak Phenolics. The allocation of preference shares could provide Deepak Phenolics with additional capital for its operations or expansion plans, while also potentially increasing Deepak Nitrite's stake in the subsidiary.

About Optionally Convertible Redeemable Preference Shares (OCRPS)

OCRPS are a type of preference shares that give the holder the option to convert them into equity shares of the company at a predetermined ratio. This financial instrument offers flexibility to both the issuer and the holder, allowing for potential equity participation while initially functioning as a debt instrument.

Conclusion

The completion of this ₹55.00 crore OCRPS transaction underscores Deepak Nitrite's commitment to its subsidiary's growth and could have implications for the company's future financial structure and strategy.

Investors and market analysts will likely be watching closely to see how this transaction impacts both Deepak Nitrite and Deepak Phenolics in the coming months, particularly in terms of operational synergies and financial performance.