Navin Fluorine International Limited (NFIL), a leading player in the Indian chemicals sector, has announced that its wholly owned subsidiary, Navin Fluorine Advanced Sciences Limited (NFASL), has completed the allotment of ₹200 crore worth of preference shares to its parent company. The development was formally disclosed to both the BSE and NSE on August 26, 2025, under Regulation 30 of SEBI’s Listing Obligations and Disclosure Requirements (LODR).

The company informed that NFASL issued 8% Non-Convertible, Non-Cumulative, Non-Participating, Redeemable Preference Shares amounting to ₹199,99,99,970. These shares carry a face value of ₹10 each and were fully subscribed by NFIL. The key objective behind this strategic allotment is the repayment of NFASL’s external debts and to reduce the overall debt burden at a consolidated level, strengthening the group’s balance sheet and financial flexibility.

Related Party Transaction and Compliance

As NFASL is a wholly owned subsidiary, the allotment of shares constitutes a related party transaction. However, NFIL clarified that the transaction was undertaken at arm’s length, in full compliance with SEBI’s regulatory framework. Importantly, the promoter group and related companies have no direct interest in this transaction, making it a corporate action driven purely by financial prudence.

Financial Performance of NFASL

Since its incorporation in February 2020, NFASL has emerged as a significant growth driver for Navin Fluorine. The subsidiary was created to focus on greenfield projects in fluorochemicals, and it has demonstrated robust growth in a short span of time.

• Turnover for FY23: ₹513.86 crore

• Turnover for FY24: ₹762.73 crore

• Turnover for FY25: ₹840.94 crore

• Profit After Tax for FY25: ₹49.93 crore

• Net worth as of March 31, 2025: ₹742.64 crore

This strong financial performance highlights NFASL’s ability to scale its operations and deliver consistent results despite industry challenges.

Strategic Significance

By infusing fresh funds into its subsidiary, Navin Fluorine is not only strengthening NFASL’s financial stability but also positioning itself for long-term sustainable growth in the chemicals sector. The repayment of external debt will lower finance costs, improve credit ratings, and free up cash flows for future investments in research, capacity expansion, and advanced chemical solutions.

Moreover, the move reflects NFIL’s strategy to streamline its capital structure while ensuring that its subsidiaries remain adequately funded to compete in global markets. The chemicals industry is becoming increasingly competitive, and debt reduction at a consolidated level places the company in a stronger position against both domestic and international peers.

Broader Impact on Investors and Market

For investors, this transaction signals a positive outlook as it reduces risk from high leverage while boosting the growth potential of NFASL. Since the allotment was fully financed through cash consideration, it does not dilute NFIL’s equity capital. Instead, it enhances shareholder value by supporting long-term profitability and deleveraging initiatives.

Market analysts believe that Navin Fluorine’s clear focus on capital discipline, debt reduction, and strengthening its fluorochemicals business will help sustain its strong financial trajectory. With NFASL’s rapid rise in turnover and profitability, the company is set to play a key role in India’s specialty chemicals growth story over the coming years.

Conclusion

The allotment of ₹200 crore preference shares by NFASL to its parent company, Navin Fluorine, is a decisive step aimed at reducing debt and boosting financial stability. With a strong track record of growth since inception and a sharp focus on advanced fluorochemicals, NFASL is well positioned to contribute significantly to Navin Fluorine’s consolidated performance in the coming years. This corporate action underlines the company’s commitment to financial prudence, operational excellence, and long-term value creation for stakeholders.

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