Graphite India picks up 46% stake in US-based company for Rs 135 crore

KOLKATA: K K Bangur controlled Graphite India has picked up a 46 per cent stake in the US-based unlisted graphene sheet producer, GeneralNSE 4.52 % Graphene Corporation for $ 18.59 million (approximately Rs 135 crore). The acquisition is in line with the company’s ‘long-standing strategy of focusing on high end technologies’.

The all-cash deal was made through Graphite India’s wholly-owned Netherlands-based subsidiary, Graphite International BV. The investment will be made in multiple tranches over two-to-three years based on the “achievement of agreed milestones” in establishing manufacturing facilities of graphene sheets, Graphite India said in release to the bourses.

Graphene is a two-dimensional sheet of pure carbon structured in a single layer of carbon atoms. Some of the potential applications of this material include electronics, including touch screens, medicine & bio-electric sensory devices, composite materials, energy storage and aerospace.

The US based unlisted company located in Knoxville (Tennessee), General Graphene has developed a breakthrough proprietary technology which would allow them to produce low cost graphene sheets for commercial applications, the company release added.

“We are partnering with General Graphene in the development and commercialisation of this disruptive and high end technology product. Graphene, with its unique properties of being the strongest, thinnest and lightest material known, is likely to open up new opportunities in high tech applications further driving efficiency and optimising costs,” Graphite India chairman K K Bangur stated in the release. Lodha Capital Markets was the financial advisor to the deal.

Kolkata-headquartered Graphite India is one of the largest Indian producer of graphite electrodes and one of the largest globally, by total capacity. Its manufacturing capacity of 98,000 tonnes per annum is spread over four plants at Durgapur (54,000 mt), Bangalore (13,000 mt), Nashik (13,000 mt) and Nurnberg in Germany (18,000 mt). The company has been enhancing its presence in value added graphite products for the auto, aerospace, chemical, pharmaceutical, metallurgical and machine tool industries. It also has facilities designed for the manufacture of impervious graphite equipment and glass reinforced plastic pipes and tanks.

The company’s consolidated net sales stood at Rs 1,965 crore in the first-quarter (Q1) ended June 30, 2018, backed by healthy capacity utilisation of 88per cent and higher price realisations compared to the Rs 390 crore it reported in the year-ago period. Net profit in the said quarter surged to Rs 957 crore as against Rs 30 crore in the corresponding previous period.

In a statement post the Q1 results, company chairman, said the strong sector momentum continued in the new fiscal, with steel production witnessing a robust growth of 5.6per cent in Q1 FY2019. “Chinese steel production too increased by 7.3per cent during the quarter. These apart, new electric arc furnaces are becoming operational as they replace certain archaic blast furnace capacities in order to curb environmental pollution,” he added.