Shares of UPL and Aarti Industries were trading higher in the early trade on May 24 after the companies entered into joint venture agreement to manufacture specialty chemicals.
At 09:17am on May 24, Aarti Industries's shares were quoting at Rs 643.95 apiece, up 2.64 percent and UPL was quoting at Rs 517.60, up 1.42 percent, on the BSE.
"Aarti Industries and company entered into a joint venture (JV) 50-50% partnership for manufacturing and marketing of specialty chemicals that find application in multiple downstream industries," UPL said in a press release on May 23.
This arrangement is a first of its kind partnership between two large Indian companies to develop, manufacture and market the downstream and value-added chemical intermediates for global markets and foster India’s ambition to become self-reliant and make for the world.
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The companies will provide key raw materials for manufacturing the desired chemicals.
The JV company is expected to commence commercial supplies by Q1FY27 with a peak annual revenue potential of Rs 400-500 crore in next 2-3 years.
Augene Chemical Private Limited (ACPL) will be a proposed entity for JV between the companies.
Both the companies propose to initially invest Rs 12.50 crore each, in equity share capital of ACPL. Subsequently, over a period of about 24 months, it is proposed to invest Rs 137.50 crore each in one or more tranches in the form of equity capital/preference share capital/debt.
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