Neogen Chemicals Limited has taken a significant step towards establishing itself in the rapidly growing lithium-ion battery market. The company's wholly-owned subsidiary, Neogen Ionics Limited (NIL), has entered into a joint venture agreement with Morita Investment Limited (MIL), a subsidiary of the Japanese chemical giant Morita Chemicals Industries Co. Limited (MCL).

Joint Venture Details

The joint venture, named Neogen Morita New Materials Limited (NML), will focus on the production, development, and sale of solid LiPF₆ salt, a crucial component in the electrolytes used in lithium-ion batteries. This strategic partnership aims to leverage the technological and manufacturing capabilities of both organizations to capitalize on the booming lithium-ion battery industry.

Ownership Structure

According to the agreement, Neogen Ionics Limited will hold a minimum of 80% of NML's share capital, while Morita Investment Limited will own up to 20%. This structure ensures that Neogen Chemicals maintains a controlling interest in the venture while benefiting from Morita's expertise and global presence.

Manufacturing and Technology

NML is set to establish its manufacturing facility in Pakhajan, Gujarat. By combining Neogen's local presence with Morita Group's globally proven technology, developed over 30 years, the venture aims to enhance the reliability and efficiency of LiPF₆ production.

Strategic Implications

This collaboration marks one of the first joint ventures between Indian and Japanese companies in the lithium-ion battery materials space. For Neogen Chemicals, the partnership offers several strategic advantages:

1. Access to advanced technology: Morita's extensive experience in lithium salt manufacturing will help improve Neogen's existing technology.
2. Global market access: The joint venture is expected to facilitate faster entry into international markets and gain approvals from global customers.
3. Participation in a growth market: The partnership positions Neogen Chemicals to play a significant role in the rapidly expanding lithium-ion battery supply chain.

Industry Context

The formation of this joint venture comes at a time when the demand for lithium-ion batteries is surging worldwide, driven by the growing electric vehicle market and renewable energy storage needs. By focusing on the production of LiPF₆, a key ingredient in battery electrolytes, Neogen Chemicals and Morita are positioning themselves as important players in this critical industry.

Governance

The joint venture agreement includes provisions for board representation, with MIL having the right to nominate one director to NML's board, provided it maintains at least a 10% equity stake. NIL will be entitled to nominate up to four directors, ensuring strong governance and alignment with Neogen Chemicals' strategic objectives.

This strategic move by Neogen Chemicals underscores the company's commitment to innovation and growth in high-potential sectors. As the lithium-ion battery industry continues to expand, the Neogen-Morita partnership is well-positioned to capitalize on emerging opportunities and contribute to the advancement of battery technology.

Neogen Chemicals Limited, a leading specialty chemicals manufacturer, has successfully raised Rs 200.00 crore through the private placement of Non-Convertible Debentures (NCDs). The company's Fund Raising Committee approved the allotment of 20,000 NCDs, each with a face value of Rs 1.00 lakh, in a meeting held on August 12, 2025.

Key Details of the NCD Issue

Security and Listing

The NCDs are secured by subservient charges on Neogen Chemicals' present and future assets, including immovable properties in Vadodara and Bharuch, Gujarat. These debentures will be listed on the Wholesale Debt Market segment of BSE Limited, enhancing their liquidity and tradability.

Repayment Structure

The repayment structure of the NCDs is designed to provide regular returns to investors:

• Interest will be paid monthly on the last day of every month
• The final interest payment will be combined with the principal redemption at maturity
• Principal repayment is scheduled for the maturity date

Investor Protection

In the event of a default in interest or principal payment, Neogen Chemicals will be liable to pay an additional interest of 2.00% per annum over the coupon rate for the defaulting period, providing a safeguard for investors.

Company's Perspective

The successful placement of these NCDs demonstrates Neogen Chemicals' strong financial position and investor confidence in the company's growth prospects. This fundraising initiative is expected to support the company's expansion plans and working capital requirements.

Market Impact

The issuance of these NCDs is likely to strengthen Neogen Chemicals' financial position, potentially impacting its growth trajectory and market performance. Investors and market analysts will be closely monitoring how the company utilizes these funds to drive future growth and enhance shareholder value.

As Neogen Chemicals continues to expand its operations in the specialty chemicals sector, this successful fundraising effort marks a significant milestone in its financial strategy, positioning the company for sustained growth in the coming years.