Shanti Inorganics Limited Plans 115,344 MTPA Amid Low Use

Shanti Inorganics Limited plans to raise installed capacity to 115,344 metric tonnes per annum (MTPA), led by a proposed 78,544-MTPA second phase at Bavla. The plan follows Fiscal 2026 utilisation of 15.01% at Bavla Phase I, an 18,000-MTPA sodium sulphite anhydrous plant that began commercial production in February 2025.

Why is Shanti Inorganics planning 115,344 MTPA of capacity?

Shanti Inorganics plans 115,344 MTPA because its proposed Bavla Phase II would add 78,544 MTPA to its existing 36,800 MTPA across Vatva and Bavla Phase I. The company’s Vatva unit has 18,800 MTPA of capacity, while Bavla Phase I added 18,000 MTPA when commercial production began in February 2025. Bavla Phase II is proposed on 17,212.07 square metres of land at Chiyada, Ahmedabad.

The proposed facility is intended to make sodium metabisulphite, sodium bisulphite and ammonium bisulphite in food and technical grades. MTPA measures annual installed production capacity, rather than actual output or sales. Shanti Inorganics says the larger plant is meant to serve food and beverages, chemicals, oil drilling, pharmaceuticals, ceramics, agrochemicals, water treatment and other end markets, but the plan depends on construction, commissioning and demand converting into production volumes.

How low was Bavla Phase I utilisation compared with Vatva?

Bavla Phase I operated far below Vatva in Fiscal 2026, using 15.01% of its 18,000-MTPA capacity against Vatva’s 92.60% utilisation of 18,800 MTPA. Bavla produced 2,702 MT of sodium sulphite anhydrous during the year, while Vatva produced 17,409 MT across its products. The comparison is affected by Bavla’s February 2025 commercial start, so its Fiscal 2025 utilisation was only 3.39% and reflects a shorter operating period.

For the two months ended May 31, 2026, utilisation was 3.64% at Bavla Phase I and 14.37% at Vatva; both figures are explicitly not annualised. At product level, Vatva’s Fiscal 2026 sodium bisulphite solution and powder capacity was used at 99.29%, while ammonium bisulphite ran at 88.47% and sodium metabisulphite at 81.56%. The proposed Phase II therefore would be built alongside a newer unit whose output must rise substantially for the expanded capacity base to be absorbed.

What demand base could support Shanti Inorganics' expansion?

Shanti Inorganics reported Rs 71.22 crore of revenue from operations in Fiscal 2026, up from Rs 57.11 crore in Fiscal 2025 and Rs 44.87 crore in Fiscal 2024. Manufacturing contributed Rs 64.07 crore in Fiscal 2026, or 89.97% of total income, while trading contributed Rs 7.15 crore. This means growth in plant output remains central to the company’s stated expansion strategy, even though part of Fiscal 2026 revenue came from trading.

Food and beverages supplied Rs 25.28 crore, or 35.84%, of Fiscal 2026 revenue from operations, making it the largest reported end-user category. Chemicals contributed Rs 15.79 crore, or 22.38%, followed by oil drilling at Rs 9.04 crore, or 12.82%. Sodium sulphite powder and anhydrous, the Bavla Phase I product, generated Rs 7.54 crore in Fiscal 2026, rising from Rs 1.68 crore in Fiscal 2025, when the unit had only recently started production.

Exports are also material to the required demand build-out: they accounted for Rs 30.03 crore, or 42.57%, of Fiscal 2026 revenue from operations, compared with 53.83% in Fiscal 2025. Domestic sales increased to Rs 40.52 crore and 57.43% of revenue in Fiscal 2026 from Rs 26.02 crore and 46.17% a year earlier. Shanti Inorganics exported to 15 countries in Fiscal 2026 and says it intends to expand customer engagement in India, the Middle East, Southeast Asia, Russia and Africa, while seeking entry into Europe and North and South America subject to regulatory approvals.

How will Shanti Inorganics fund and operate Bavla Phase II?

Shanti Inorganics proposes to deploy Rs 42.50 crore from issue net proceeds to partly finance Phase II capital expenditure, including a sulphur burner system, ammonium bisulphite system, sodium metabisulphite system and associated equipment. The company says the equipment will be installed on a turnkey basis, covering engineering, procurement and commissioning. The disclosed funding is partial financing, so the source does not establish the total project cost or a completion date.

The planned sulphur burner technology is intended to produce steam without external fuel, with a waste-heat boiler supplying steam for plant operations. Shanti Inorganics also plans automation, a distributed control system and continuous production processes to reduce manual intervention and support consistent product quality. These operating benefits depend on successful installation and commissioning, as well as reliable supplies of sulphur dioxide, sodium hydroxide, sodium carbonate and liquid ammonia.

Raw-material purchasing is concentrated despite the company’s statement that it has a diversified supplier base. Its top five suppliers represented Rs 20.45 crore, or 70.08%, of Fiscal 2026 raw-material purchases, while the top 10 represented Rs 25.75 crore, or 88.26%. Sulphur dioxide was the largest input at Rs 13.22 crore, or 36.51% of purchases, which makes continuity and pricing of that feedstock relevant to utilisation at both existing and proposed plants.

What are the principal execution constraints?

Shanti Inorganics faces a demand-ramp requirement because the planned 78,544-MTPA addition is more than four times the installed capacity of Bavla Phase I. Revenue is also concentrated among customers: the top 10 customers accounted for Rs 44.69 crore, or 63.35%, of Fiscal 2026 revenue from operations, although this was lower than 68.15% in Fiscal 2025. Retaining and expanding orders from these customers, while adding new customers, is therefore relevant to filling capacity.

The company operates in a regulated chemical-manufacturing environment covering air and water discharge, hazardous-substance handling, storage and employee exposure. It uses third-party logistics for incoming raw materials and finished-goods transportation, and had no long-term logistics contracts as of the prospectus date. Its plan to sell food and technical grades in additional international markets also requires quality consistency and applicable regulatory approvals, particularly for the intended North and South American expansion.

Conclusion

Shanti Inorganics is pursuing a step-change from 36,800 MTPA to 115,344 MTPA, rather than an incremental expansion. The immediate contrast is between Vatva’s 92.60% utilisation in Fiscal 2026 and Bavla Phase I’s 15.01%, which shows that the company must lift output at the newer 18,000-MTPA plant while adding a much larger second phase.

The next disclosed milestones are the deployment of Rs 42.50 crore of issue proceeds into Phase II equipment and the development of the 17,212.07-square-metre Phase II site. Readers should watch for Phase II commissioning details, Bavla Phase I utilisation after a full operating year, and whether domestic and export sales growth supports the proposed 78,544-MTPA addition.