The Company plans Bavla capacity of 78,544 MTPA by June 2027

The Company plans to commission a 78,544 metric tonnes per annum (MTPA) sulphur-chemical facility at Bavla, Ahmedabad, in June 2027. The planned Bavla capacity exceeds the Company’s existing combined installed capacity of 36,800 MTPA, while its 18,800-MTPA Vatva unit operated at 92.60% capacity utilisation in Fiscal 2026.

How large is The Company’s planned Bavla capacity addition?

The Company’s proposed Bavla facility is designed to add 78,544 MTPA of capacity for sodium meta bisulphite, sodium bisulphite powder or solution, and ammonium bisulphite. The project is planned on plots 6 and 7 at Sankalp Industrial Estate, Chiyada, Bavla, Ahmedabad, on approximately 17,212.07 square metres of adjacent land already acquired by the Company.

The proposed 78,544-MTPA addition is larger than the Company’s two existing manufacturing facilities combined. As of March 31, 2026, the Vatva unit had installed capacity of 18,800 MTPA and the existing Bavla unit had 18,000 MTPA, producing a combined installed base of 36,800 MTPA. If all three facilities are available after commissioning, the stated installed base would be 115,344 MTPA.

The Company’s existing facilities serve different product categories. The Vatva unit manufactures sodium meta bisulphite, sodium bisulphite solution or powder, and ammonium bisulphite, whereas the existing Bavla unit manufactures sodium sulphite anhydrous. The proposed Bavla facility is intended to add capacity in the product categories already produced at Vatva rather than in sodium sulphite anhydrous.

The Company acquired plot 6, measuring approximately 8,596.28 square metres, for Rs 1.50 crore and plot 7, measuring approximately 8,615.79 square metres, for Rs 86.16 lakh. The purchase agreements were executed on July 11, 2023, and November 16, 2024, respectively, and the Company states that both land purchases were funded through internal accruals rather than issue proceeds.

Why is The Company adding Bavla capacity now?

The Company is adding Bavla capacity while the Vatva unit is operating close to its installed limit in Fiscal 2026. Vatva produced 17,409 metric tonnes against installed capacity of 18,800 metric tonnes, resulting in utilisation of 92.60%, according to a July 22, 2026 certificate from independent chartered engineer S. K. Patel.

Capacity use varied across Vatva’s three products in Fiscal 2026. Sodium bisulphite solution or powder produced 8,142 metric tonnes from 8,200 metric tonnes of installed capacity, or 99.29% utilisation; ammonium bisulphite produced 7,962 metric tonnes from 9,000 metric tonnes, or 88.47%; and sodium meta bisulphite produced 1,305 metric tonnes from 1,600 metric tonnes, or 81.56%.

The existing Bavla unit had materially lower utilisation because commercial production began only in February 2025. That unit produced 2,702 metric tonnes of sodium sulphite anhydrous in Fiscal 2026 against capacity of 18,000 metric tonnes, equal to 15.01% utilisation. The comparison shows that the proposed plant is focused on the three product lines made at the more fully used Vatva unit, rather than adding sodium sulphite anhydrous capacity.

The Company says the project is intended to support growth initiatives and serve domestic and export demand. It also says the new plant will enable production of higher-grade products with improved quality and efficiency, though those outcomes depend on the plant being built, commissioned and operated as planned by June 2027.

What will The Company spend on the Bavla project and how will it fund it?

The Company estimates total capital expenditure of Rs 107.71 crore for the Bavla project, including applicable goods and services tax and other taxes. Plant and machinery accounts for Rs 85.59 crore of the estimate, civil and structural work accounts for Rs 19.67 crore, and electricals and fittings account for Rs 2.44 crore.

The stated financing plan comprises Rs 42.50 crore of net proceeds from the fresh issue, Rs 34.00 crore of secured term loans from HDFC Bank Limited, Rs 12.42 crore from private placement of equity shares, and Rs 18.79 crore from internal accruals. HDFC Bank sanctioned the secured term loan of Rs 34.00 crore on November 29, 2024.

The Company had deployed Rs 21.23 crore towards the project as of June 30, 2026. That amount included Rs 15.49 crore from the HDFC Bank loan and Rs 5.74 crore from internal accruals. The Company plans to use Rs 42.50 crore of net proceeds for the project in Fiscal 2027, subject to the issue being completed and proceeds being available.

The Company states that the fresh-issue allocation will part-fund civil work, plant and machinery, and electrical fittings at Bavla. General corporate purposes may receive no more than 15% of gross issue proceeds or Rs 10.00 crore, whichever is lower, under the disclosed plan and the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations.

What equipment and utilities will the new Bavla facility require?

The project’s Rs 85.59 crore plant-and-machinery estimate includes a sulphur burner system, an ammonium bisulphite system and a sodium metabisulphite system. Sodium metabisulphite is also referred to as SMBS in the project disclosures. The Company says the equipment will support higher-grade product manufacturing and expanded production capacity.

The machinery plan includes Rs 27.85 crore for a sulphur burner and ammonium bisulphite system supplied by Harickson Solutions LLP, Rs 22.35 crore for imported engineering and equipment involving A.H. Lundberg Systems and Haricksons (Canada), and Rs 21.65 crore for SMBS system equipment. The cost estimate also includes a water-treatment plant, six 200-kilolitre sodium bisulphite solution storage tanks and a 20-metric-tonne ammonia storage tank.

The Company expects the facility to require approximately 1,600 to 1,700 kilovolt-amperes of power and proposes to source this through a power-supply agreement with Uttar Gujarat Vij Co. Ltd. The plant is expected to consume approximately 82 kilolitres per day of water during operations. These utility arrangements will need to support commercial operation of the stated 78,544-MTPA capacity.

The Company says it does not require special external technical know-how because the project will operate in its existing line of business. It has obtained, or is in the process of obtaining, routine approvals from government and local authorities, while non-agricultural permission for industrial use of the project land has already been granted by the Jilla Vikas Adhikari, Ahmedabad.

What could alter The Company’s June 2027 timetable or project cost?

The Company’s implementation plan schedules building and civil works from September 2026 to April 2027. Purchase and commissioning of plant machinery and electricals are scheduled from September 2026 to March 2027, followed by trial production from April 2027 to June 2027 and commercial production in June 2027.

The June 2027 target requires construction, machinery installation, electrical work and trial production to proceed within the disclosed timeline. It also requires necessary approvals to be obtained at the relevant stages and utility requirements of approximately 1,600 to 1,700 kilovolt-amperes of power and 82 kilolitres per day of water to be met.

The Company says its cost estimates are based on its business plan, prevailing market conditions, purchase and work orders, vendor quotations, interest rates, exchange-rate movements and other commercial and technical factors. The objects have not been appraised by a bank, financial institution or other independent agency, and the Company has not entered into definitive arrangements with some vendors.

If project costs rise or the net proceeds are lower than required, the Company says it may use available sources including incremental debt and internal accruals. Brickwork Ratings India Private Limited has been appointed as monitoring agency and is required to monitor utilisation of net proceeds quarterly until the proceeds are fully utilised.

Conclusion

The Company’s planned Bavla facility would materially change its manufacturing scale by adding 78,544 MTPA against 36,800 MTPA of installed capacity across Vatva and the existing Bavla unit as of March 31, 2026. The capacity focus also aligns with the Vatva product lines, where total utilisation reached 92.60% in Fiscal 2026 and sodium bisulphite solution or powder reached 99.29%.

The next disclosed milestones are machinery and electrical commissioning by March 2027, completion of civil work by April 2027 and trial production through June 2027. Progress on approvals, vendor contracting, the planned Rs 42.50 crore use of net proceeds and any change in project costs will determine whether commercial production begins in June 2027 as scheduled.