What’s new

• Board approves acquisition of remaining 51% in Flow Tech Chemicals for ₹55 cr.
• Transaction at ₹1,418/share, 8% below independent fair value of ₹1,545.
• Target contributed ₹341.66 cr turnover, ₹9.80 cr net profit in FY26.

Why it matters

The deal tightens Primo's control over a key chlorine off-taker. At a valuation below fair value, the pricing is favourable. For a micro-cap with ₹591 cr market cap, deploying 9.5% of that into a profitable associate captures the profit from chlorine consumption.

What we’re watching

• Shareholder approval via postal ballot – e-voting runs 7 July to 5 August.
• Flow Tech's margin trajectory post-integration given chlorinated paraffin market dynamics.
• Potential impact on Primo's consolidated debt post cash outflow of ₹55 cr.

The full read

Primo Chemicals is buying the remaining 51% of Flow Tech Chemicals for ₹55 crore in cash at ₹1,418.20 a share, an 8% discount to the ₹1,545.40 fair value set by BDO Valuation. The deal turns Flow Tech into a wholly owned subsidiary. That matters because Flow Tech is a consumer of Primo's chlorine, giving Primo tighter control over this off-taker. In FY26, Flow Tech generated ₹341.66 crore turnover and ₹9.80 crore net profit. Those figures will now flow fully onto Primo's consolidated books. For a company with a ₹591 crore market cap, the ₹55 crore outlay is material at 9.5% of market size. The board has also called a postal ballot, with e-voting from 7 July to 5 August, to secure shareholder approval. Two independent director appointments and MD/ED remuneration will also be voted on. The acquisition price being below the independent valuation gives management room to argue discipline, but the cash outflow and integration risks are yet to be tested.

Primary source: BSE · NSE