Grasim Industries while announcing its financial performance for September 2020 (Q2FY21) quarter, said the board of directors have approved divestment of the company's Fertiliser Business, Indo Gulf Fertilisers (“IGF”), by way of a slump sale to Indorama India Private Ltd (“IIP”),
IIP is a subsidiary of Indorama Corporation Pte. Ltd, Singapore (“Indorama Corporation”).
Grasim will transfer its fertiliser business for a consideration of Rs2,649cr to IIP. Adding Grasim said, " This consideration is commensurate to the strength and future potential of the business."
Dilip Gaur, MD Grasim Industries Ltd said “The divestment of the Fertiliser business by Grasim is a strategic portfolio choice and unlocks value for the shareholders. It is in line with the strategic thrust of the Company to focus on core businesses. Indo Gulf Fertilisers is synonymous with strong performance and high sustainability standards. To take it to the next level in size and value, the company is pleased to have found in Indorama Corporation, a credible fertiliser player to own IGF. IGF will benefit from synergies and expertise of Indorama Corporation’s existing agri portfolio.”
According to Grasim, the divestment of the Fertiliser Business is a significant value unlocking exercise for Grasim. It will further enable the Company to pursue growth opportunities in its core businesses.
Currently, Indo Gulf Fertilisers is engaged in manufacturing, trading, and sale of urea and other agri-inputs with a 1.2 Mn TPA Urea manufacturing plant at Jagdishpur in Uttar Pradesh.
The above-mentioned deal is subject to the necessary statutory and regulatory approvals including approvals of the NCLT, the Stock Exchanges, SEBI, Competition Commission of India (CCI), the respective Shareholders and lenders/creditors of each of the companies.
In Q2FY21, Grasim posted a consolidated net profit of Rs1,521.40cr up 3.30% from Rs1,472.77cr in the corresponding period of the previous year.
Consolidated revenue was at Rs18,400.25cr in the quarter under review, broadly subdued compared to Rs18,400.17cr a year ago same period.
At around 2.15 pm, Grasim was trading at Rs829.10 per piece up 0.28% on Sensex.