Tega Industries Secures ₹1,500 Crore Facility for Molycop Deal

Introduction to the Financing Milestone

Tega Industries Limited has advanced its plan to acquire Molycop by finalizing key financing arrangements. On February 13, 2026, the company executed a Share Subscription Agreement (SSA) with its Singapore-based wholly-owned subsidiary, Tega MC Investment Pte. Ltd. (Tega HoldCo). This agreement establishes the mechanism for funding the acquisition, which was first announced on November 29, 2025. The move follows a board approval on February 12, 2026, for a significant borrowing facility, solidifying the financial structure for one of the largest outbound acquisitions by an Indian manufacturing firm.

Detailed Financing Structure

The company's Board of Directors has approved a multi-layered financing strategy to fund the acquisition. A primary component is a borrowing facility of up to ₹1,500 Crore from scheduled commercial banks. These funds are part of a larger capital deployment plan channeled through subsidiary entities. Tega Industries will make a substantial investment into Tega HoldCo, comprising up to ₹3,517 Crore through Optionally Convertible Redeemable Preference Shares (OCRPS) and up to ₹1 Crore in ordinary shares. This structure positions Tega HoldCo as the primary vehicle for the international transaction.

To further support the financing, the board also sanctioned the incorporation of a new wholly-owned subsidiary in India, referred to as 'India WoS'. Tega Industries will invest up to ₹99 Crore in this new entity, which will then channel the funds into Tega HoldCo. This creates a robust and compliant financial architecture to facilitate the large-scale cross-border acquisition.

The Share Subscription Agreement and OCRPS Terms

The SSA executed on February 13, 2026, formalizes the investment into Tega HoldCo. The agreement centers on the subscription to OCRPS at an issue price of USD 1 per share. These preference shares come with specific terms designed to provide flexible, long-term capital. The OCRPS have a tenure of 20 years and carry a nominal dividend of 0.1%. In terms of capital structure, they are subordinate to any third-party debt but rank senior to other equity securities. Tega HoldCo retains the option to either redeem the shares at the original issue price or convert each OCRPS into one ordinary share of Tega HoldCo at any time before the tenure expires. As Tega HoldCo is a wholly-owned subsidiary, this transaction is classified as a Related Party Transaction, which the company has confirmed is being conducted on an arm's length basis.

Background of the Molycop Acquisition

The financing activities are directed towards the acquisition of Molycop, a global leader in grinding media for the mining industry. Tega Industries, in consortium with funds managed by affiliates of Apollo Global Management, signed a definitive agreement on November 28, 2025, to acquire Molycop from an affiliate of American Industrial Partners (AIP). The deal values Molycop at an enterprise value of approximately USD 1.45 billion. This acquisition is a strategic move by Tega to transform itself from an Indian company with a global presence into a leading multinational in the mining solutions sector.

Strategic Rationale and Market Impact

The acquisition of Molycop is expected to significantly enhance Tega Industries' global market share and operational footprint. Post-acquisition, the combined entity will operate 26 manufacturing facilities worldwide, serving over 400 mines across 40 countries. This expansion provides Tega with access to key mining markets in North America, Latin America, and Australia, where Molycop has a strong presence. The integration of Molycop's product portfolio, which includes grinding media and chemical reagents, will allow Tega to offer a comprehensive suite of solutions to the mining industry, creating substantial opportunities for cross-selling and operational synergies.

Supporting Equity Fundraise

To bolster its financial position for the acquisition, Tega Industries successfully completed a fundraise of approximately ₹1,713 Crore through a preferential issue of equity shares. The shares, with a face value of ₹10, were issued at a price of ₹1,994 per share. The company reported a strong response to the issue from marquee domestic institutional investors and high-net-worth individuals, indicating robust investor confidence in the strategic rationale behind the Molycop acquisition and Tega's long-term growth prospects.

Summary of Financial Commitments

Timeline and Next Steps

The acquisition process has followed a clear timeline, beginning with a term sheet signed on September 10, 2025, followed by the definitive agreement on November 28, 2025. With the financing structure now largely in place as of February 2026, the final step is securing the necessary regulatory approvals in the various countries where Molycop operates. The acquisition is expected to close by March 31, 2026, with a potential extension of up to 12 months if required. The market will be watching for the finalization of borrowing documents and the successful integration of Molycop's operations post-closure.

Conclusion

Tega Industries has methodically arranged a comprehensive financing package to support its transformative acquisition of Molycop. The combination of a substantial borrowing facility, strategic investments through subsidiaries, and a successful equity fundraise demonstrates the company's commitment and financial capacity to execute this large-scale transaction. The deal is poised to reshape the global mining consumables landscape and establish Tega as a dominant international player, with all eyes now on the final regulatory approvals ahead of the anticipated closing date.