Murugappa group’s Coromandel International, a provider of agricultural solutions, has announced its plan to acquire a controlling stake in NACL Industries, formerly known as Nagarjuna Agrichem. As per the media reports, Coromandel will initially acquire a 53% stake in NACL Industries for INR 820 crore, purchasing shares from the current promoter, KLR Products Ltd, at INR 76.7 per share.
In accordance with SEBI Takeover Regulations, Coromandel will also make an open offer to acquire up to 26% of the company’s equity from public shareholders. The transaction, which is subject to regulatory approvals, is expected to be completed in the coming months.
NACL Industries is a producer of active ingredients for crop protection chemicals, catering to global clients such as Syngenta, Corteva, Nissan Chemical, and Adama.
Strengthening Coromandel’s Crop Protection Business
The acquisition aligns with Murugappa Group’s Coromandel International’s broader strategy to enhance its presence in the crop protection industry. Coromandel, the second-largest producer of phosphatic fertilizers in India, has been expanding its footprint in agricultural nutrients and crop protection. The acquisition of NACL Industries provides a strategic advantage by strengthening its backward integration, securing key supply chain components, and broadening its product portfolio.
NACL Industries operates multiple technical and formulation plants in Andhra Pradesh and has a central research and development facility near Hyderabad. Additionally, its subsidiary has recently invested in a technical-grade facility at Dahej, capable of manufacturing active ingredients. The company has also been engaged in contract manufacturing for multinational agrochemical firms for over two decades. In the financial year 2023-24, NACL Industries recorded a turnover of ₹1,787 crore.
Expansion into New Segments and Markets
Coromandel International’s Executive Chairman, Arun Alagappan, emphasized the strategic significance of the acquisition, stating that integrating Coromandel’s distribution network and industry expertise with NACL’s manufacturing capabilities and product range would enhance the company’s operational scale. He highlighted that the acquisition would not only expand Coromandel’s presence in the domestic market but also enable deeper engagement with global customers through strategic contract development and manufacturing organization (CDMO) partnerships.
Managing Director and CEO S. Sankarasubramanian echoed this sentiment, noting that the combined synergies in research and development and manufacturing would accelerate the commercialization of new products and increase offerings in both domestic and international markets.
Murugappa Group’s Expanding Business Portfolio
The Murugappa Group, a 124-year-old conglomerate, has a diversified business portfolio with nine listed companies, including Coromandel International, Carborundum Universal, CG Power and Industrial Solutions, Cholamandalam Financial Holdings, Cholamandalam Investments and Finance, EID Parry (India) Ltd, Shanti Gears, Tube Investments, and Wendt India. The group has a track record of successful acquisitions, including the turnaround of CG Power and Industrial Solutions after acquiring it from its financially distressed former promoters.
Also read: Coromandel International Unveils Hi-Tech Soil and Leaf Testing Lab to Empower Farmers
Transaction Advisors and Regulatory Filings
Financial advisors JM Financial and EY facilitated the deal, while AZB & Partners provided legal counsel. SSPA acted as the valuer for the transaction. In its regulatory filing, Murugappa Group’s Coromandel International confirmed the board’s approval of the acquisition of 10,68,96,146 equity shares of NACL Industries, representing 53.13% of its paid-up equity share capital. The agreement was signed among Coromandel International, NACL Industries, KLR Products Ltd, K. Lakshmi Raju, and Bright Town Investment Advisor Pvt Ltd, a member of NACL’s promoter group.
Future Prospects
With this acquisition, Murugappa Group’s Coromandel International is set to become one of India’s prominent crop protection companies. The deal is expected to fast-track the company’s expansion into contract manufacturing, facilitate the development of new products, and reinforce its presence in the domestic formulation business. As the transaction moves through the regulatory approval process, Coromandel is positioning itself to leverage NACL’s assets and capabilities to drive its long-term growth strategy in the agrochemical sector.