TANFAC Targets Q3 FY27 Start With Rs 649 Crore Arrangements

TANFAC Industries targets Q3 FY27 commissioning of a 20,000 metric-tonnes-per-annum (MTPA) HFC-32 refrigerant-gas plant at Cuddalore, alongside supply arrangements valued at about Rs 649 crore annually from January 2027. The disclosed arrangements cover more than 12,500 MTPA, while the project had Rs 231 crore spent as of September 30, 2026.

What is TANFAC building at Cuddalore?

TANFAC is planning a 20,000 MTPA HFC-32 refrigerant-gas plant at Cuddalore, with commissioning targeted in Q3 FY27 and investment stated at Rs 495 crore. The presentation describes the facility as a downstream addition to its fluorochemical portfolio and identifies in-house anhydrous hydrofluoric acid, or AHF, as a competitive element of the project.

The planned plant can draw on TANFAC’s AHF platform, whose hydrofluoric acid capacity was doubled to 30,000 MTPA from 15,000 MTPA through a brownfield unit commissioned in October 2024. That capacity operated at 95% utilisation in FY26. TANFAC identifies refrigerant gas, lithium batteries, electronic grades and fluorinated organic products as downstream applications for hydrofluoric acid.

HFC-32 is used standalone and in blends, according to the presentation. Management describes it as having low global-warming potential, high efficiency and low flammability, and says there is no viable substitute. Those points are TANFAC’s stated rationale for the project, rather than an independently disclosed market forecast.

What supply arrangements has TANFAC disclosed for the project?

TANFAC has disclosed supply arrangements with stated annual value of about Rs 649 crore excluding goods and services tax, or GST, scheduled to start in January 2027. They consist of a seven-year contract with a Japanese customer, a five-year memorandum of understanding, or MoU, with a large multinational company, and an agreement of infinite duration with an air-conditioning and commercial-refrigeration company.

The two arrangements with specified volumes add to 12,500 MTPA, while TANFAC does not disclose a volume for the third agreement. The company therefore presents the total as more than 12,500 MTPA. Although the agreements appear on the HFC-32 project page, the table calls their subject fluorinated products and does not identify the precise product for each arrangement.

The Rs 649 crore figure is the disclosed annual value of arrangements, not reported revenue. Separately, TANFAC said its 2026 refrigerant-gas and other value-added-products announcement involved back-to-back agreements and MoUs covering a majority of planned capacity, with aggregate order value of about Rs 3,673 crore.

How is TANFAC funding the HFC-32 project?

TANFAC raised Rs 350 crore of equity in 2026, comprising a Rs 250 crore qualified institutional placement in June and a Rs 100 crore preferential allotment in September. The company says the raise is primarily allocated to the upcoming HFC-32 project. Anupam Rasayan India Ltd, the promoter, contributed Rs 60.9 crore to the preferential allotment.

As of September 30, 2026, TANFAC reported Rs 360 crore as total committed and Rs 231 crore as actual spending on the HFC-32 project. The presentation gives no expenditure schedule, equipment-order status or construction milestone behind the actual-spending figure, beyond its Q3 FY27 commissioning target.

The Rs 495 crore investment presented for the refrigerant-gas plant differs from the Rs 360 crore total committed reported in the funding update. TANFAC does not explain whether the gap represents future spending, project phases, other value-added products, working capital or another item. Reconciliation of these two project figures remains an undisclosed matter in the presentation.

How has TANFAC’s financial position changed during expansion?

TANFAC’s total equity increased to Rs 736.8 crore in September 2026 from Rs 373.2 crore in March 2026, following the June and September equity issuances. Cash and cash equivalents rose to Rs 99.1 crore from Rs 21.1 crore, while capital work-in-progress increased to Rs 153 crore from Rs 28.5 crore over the same period.

Total assets rose to Rs 1,006 crore in September 2026 from Rs 527.7 crore in March 2026. Non-current borrowings were Rs 66.1 crore versus nil in March, while current borrowings decreased to Rs 69.5 crore from Rs 92.8 crore. The presentation does not allocate these borrowings specifically to the HFC-32 project.

Inventory increased to Rs 147.3 crore from Rs 92.8 crore, and trade payables rose to Rs 75.9 crore from Rs 25.1 crore. Management attributed the inventory increase primarily to bulk fluorspar purchases intended to maintain supply continuity amid possible West Asia disruptions, and said the trade-payable increase matched the additional raw-material purchase.

What operating trends precede the planned HFC-32 start?

TANFAC reported revenue from operations of Rs 417.7 crore in H1 FY27, compared with Rs 344.7 crore in H1 FY26, a 21.2% increase that management attributed mainly to higher realisations and newly introduced value-added products. Profit after tax, however, was Rs 35.9 crore in H1 FY27, compared with Rs 36.5 crore a year earlier.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose to Rs 60.6 crore in H1 FY27 from Rs 57.4 crore in H1 FY26, but EBITDA margin declined to 14.4% from 16.6%. Management said AHF gross profit per tonne remained largely stable, while higher realisations reduced gross-margin percentage and newly launched products were in their initial ramp-up phase. It also cited sulphur, power, fuel and logistics costs.

In Q2 FY27, revenue from operations was Rs 230.5 crore, up from Rs 168.7 crore in Q2 FY26, while EBITDA rose to Rs 31.1 crore from Rs 27.5 crore. EBITDA margin fell to 13.3% from 16.2%. Management expects H2 FY27 to be stronger than H1 FY27, based on anticipated moderation in raw-material prices, operating leverage and the scale-up of new products.

Conclusion

TANFAC’s HFC-32 plan combines a Q3 FY27 target for 20,000 MTPA capacity with arrangements valued at about Rs 649 crore annually from January 2027. Its existing 30,000 MTPA hydrofluoric acid platform, Rs 350 crore of 2026 equity funding and Rs 231 crore of reported project spending show the project’s links to the company’s downstream fluorochemical expansion.

The next disclosed events are the Q3 FY27 commissioning target and the January 2027 start dates for the three arrangements. Investors should watch for progress on commissioning, the conversion of agreements and the MoU into shipments, and TANFAC’s explanation of the difference between Rs 495 crore of stated project investment and Rs 360 crore of committed spending.