The expected benefits of the project includes indigenization of LIB raw materials for global and India’s EV & ESS, promoting sustainability by reducing dependency on fossil fuel and preservation of natural resources and enhancing stakeholders value by participating in a sunrise sector with a very strong growth trajectory.

The company will produce 200,000 MTPA of Lithium Iron Phosphate (LFP) Cathode Active Material, catering to 100 GWh of Li-ion Battery, in phases over the next 5-6 years.

The phase I capacity expansion will be of 40,000 MTPA at an estimated cost of Rs 1,125 crore and to be operational in 27 to 36 months at Odisha. The capex will be funded largely through internal accruals and balance from debt. At full utilization of 40,000 MT, the company expects to generate a revenue of approximately 4X the capex with a very strong profitability and returns profile.

Cathode materials are critical components required in the production of lithium-ion cells that constitute 50-55% of the cell cost, with LFP being one of the predominant materials used in the manufacturing of LiB Cells. Cathode material demand is expected to increase to 9.4 million tonnes annually by 2030 to meet the required global production of LiB cells.

Anurag Choudhary, chairman and managing director (CMD) & CEO of Himadri Speciality Chemical said, “This is in line with our sustainability goals to contribute to Global & Domestic Carbon-Neutral Revolution.

Global demand for LiB is expected to grow by about 27% annually to reach about 4700 GWh by 2030 and cathode material which is a critical component for the LiB value chain is expected to increase to 9.4 million tonnes by 2030 to meet the required global production of LiB cells. We remain committed to delivering high-quality, niche, and specialized chemistry to diverse industries worldwide.”

Meanwhile, the company’s wholly owned subsidiary, HCEL proposed to acquire 100% shareholding of Himadri Future Material Technology by HCEL. On completion of the said acquisitions, Himadri Future Material Technology will become a wholly owned subsidiary) of HCEL and a step down wholly owned subsidiary of the company.

By this acquisition, the company will set up the manufacturing facility for cathode active material through step down WOS. The said acquisition is expected to be completed within 60 days from the date of signing of SPA as may be mutually agreed between the parties.

Himadri Speciality Chemical is the largest manufacturer of Coal Tar Pitch (CTP) in India.

The company reported consolidated net profit of Rs 100.64 crore in Q2 FY24, steeply higher than Rs 35.93 crore in Q2 FY23. Net sales declined 5.1% YoY to Rs 1,004.52 crore in Q2 FY24.