GANESH BENZOPLAST LIMITED

Key Corporate Development

Ganesh Benzoplast Limited has entered into an agreement to divest its liquid storage tank (LST) farm business at JNPA, Goa, and Cochin locations, along with the JNPA-linked rail business connecting Daund. The total consideration for this divestment is ₹1,154 crores.

Transaction Structure and Payment Schedule

The ₹1,154 crores consideration will be received in the following tranches:

  • Approximately ₹500 crores expected before January 2027
  • Approximately ₹300 crores expected before March 2027
  • Balance ₹354 crores to be received in various tranches over the next 12-18 months based on milestone achievements including port license transfers and tank commissioning

The transaction is subject to regulatory approvals from port authorities and shareholder approval.

Fund Allocation Plan

From the first tranche of ₹500 crores:

  • ₹190-200 crores allocated for tax payments and closing existing bank limits
  • ₹200 crores allocated for shareholder returns through combined share buyback and special dividend
  • Approximately ₹100 crores reserved for expanding chemical business and increasing EPC order book

Promoters will not participate in the share buyback, making it exclusively available to public shareholders.

Current Business Performance

Chemical Business (June 2026 Quarter):

  • Turnover: ₹60 crores
  • Profit: ₹6 crores PAT
  • Current capacity: 2 plants with approximately 1,000 tons/month each
  • Capacity utilization: 70-80%
  • FY26 chemical business PAT: Expected to cross ₹20 crores (from ₹5 crores in FY24)

EPC Business:

  • Current order book: Approximately ₹500 crores (including ₹300 crores KKR order)
  • FY27 expected EPC revenue: ₹250 crores per annum
  • PAT margins: Conservative estimate of 7-8%

LST Business:

  • JNPA operations expected to remain in books until December 2026/January 2027
  • Kochi and Goa operations to be gradually removed over calendar year 2027
  • Company retains small shareholding in Kandla terminal (insignificant)

Future Growth Plans

Chemical Division Expansion:

  • REACH certification obtained for benzoic acid and sodium benzoate for UK and European markets
  • Current export orders: 600 tons, expected to grow to 2,000 tons annually
  • Capacity expansion planned to double production capability in one plant
  • Expansion completion expected: July 2027
  • Advanced discussions with technology providers for niche agro product derivatives
  • Target: Increase chemical division PAT from current ₹18 crores to ₹60-70 crores within 4-5 years

EPC Division Growth:

  • Established execution capabilities demonstrated through projects for Adani, Reliance, Jindal, GACL
  • Notable projects include Mumbai airport fuel tanks, Mundra Petrochemicals gas holders, Dahej pipeline
  • Target EPC order book: ₹2,500-3,000 crores within 4-5 years
  • Expected PAT: ₹150 crores from EPC division within 4-5 years

Combined Business Outlook

Management targets achieving ₹210 crores PAT (Chemical: ₹60-70 crores + EPC: ₹150 crores) within 3-5 years, representing significant growth from current levels.

Capital Structure and Debt Strategy

Company plans to maintain minimal debt levels, using deal proceeds for expansions. Will maintain banking lines primarily for bank guarantees required for EPC projects.

Non-Compete Arrangement

The divestment includes standard non-compete clauses preventing re-entry into LST business, except for the carved-out Kandla shareholding.