TANFAC Industries Ltd, one of India’s leading producers of hydrofluoric acid and its derivatives, has raised ₹250 crore through a Qualified Institutional Placement (QIP).
The proceeds will be used primarily to set up an HFC-32 refrigerant gas manufacturing plant, expand downstream fluorinated chemical capacities and meet general corporate requirements.
The fund raise marks the company’s first equity capital raise in more than three decades.
Strong investor interest
The QIP, launched on June 23 and closed on June 25, was priced at ₹1,985.83 per equity share, representing a 5% discount to the floor price of ₹2,090.34.
The issue attracted marquee global and domestic institutional investors, including Motilal Oswal (Mutual Fund & AIF), Malabar Investments, 360 One, Niveshaay Funds and Bengal Finance and Investment (Lucky Group), among others.
Order visibility
The proposed investment is aimed at strengthening TANFAC’s presence in the high-value refrigerant gas segment while expanding its portfolio of value-added fluorochemical products.
“This investment is backed by strong demand visibility, as the company has already secured three consecutive long-term supplier arrangements with leading global customers,” TANFAC Industries Managing Director Afzal Malkani said.
Long-term contracts
The company has secured an indefinite-period supply contract with a leading air-conditioning and commercial refrigeration company, with an estimated value of around ₹61 crore.
It has also signed a seven-year contract to supply 7,500 tonnes to a Japanese customer, valued at about ₹2,362 crore. An MoU with a multinational company to supply 5,000 tonnes annually for five years, valued at around ₹1,250 crore.
Together, these agreements are estimated to generate business worth approximately ₹3,612 crore over the next five to seven years.
Company background
The company said investments in expanding hydrofluoric acid and sulphuric acid capacities will strengthen backward integration, improve raw material security, enhance cost competitiveness and support margin expansion.
TANFAC is a joint sector company promoted by Anupam Rasayan India Ltd and Tamil Nadu Industrial Development Corporation (TIDCO).