Neogen Chemicals Eyes Debt Route for Growth, Board to Weigh NCD Proposal

Image Source: Neogen Chemical Ltd

Neogen Chemicals Ltd has fixed a board meeting on 12 July 2025 to approve and hopefully adopt a fund-raising scheme through issuance of non-convertible debentures (NCDs). The move is part of the specialty chemicals manufacturer's strategy to raise debt from the market for strategic expansion and working capital flexibility.

Key Highlights:

Fund-Raising Proposal:

The corporate entity aims to distribute the NCDs through permitted channels, pending approval by the regulations and legislature.

The product will be designed to generate fixed returns without equity dilution, which will be appealing to high-net-worth and institutional investors.

Strategic Goals:

Proceeds can be used to fund capacity expansion, working capital needs, and to retire outstanding obligations.

The project is part of Neogen's overall growth strategy in bromine and lithium-based chemical segments.

Regulatory Framework:

The issue will be in accordance with SEBI and Companies Act regulations, such as appointment of a debenture trustee and establishment of a charge on company property.

The board will also take into account terms like tenure, coupon rate, and redemption structure.

Market Context:

Neogen has demonstrated consistent financial performance with strong demand in pharma, agrochemicals, and battery materials.

The NCD route offers a low-cost alternative to equity capital, maintaining shareholders' value without sacrificing liquidity.

The July 12 board meeting move will be watched with interest by debt market participants and industry analysts following India's specialty chemicals sector.

Sources: Rediff MoneyWiz, Business Standard, Neogen Chemicals Ltd.