Neogen Chemicals spurts 6% on pact with Japanese major for electrolyte solutions

Shares of Neogen Chemcials climbed around 6 percent in early trade on April 11 after the company signed an agreement with Japan’s MU
Ionic Solutions Corporation to offer electrolyte solutions in India.

MU Ionic Solutions (MUIS) is a joint venture between Mitsubishi Chemical Corporation and UBE Corporation and is a group company of The Mitsubishi Chemical Group, a Japanese conglomerate. The group is an industry leader in electrolytes used in lithium-ion-based batteries, with manufacturing facilities across Japan, the US, UK and China.

“Under the terms of the agreement, Neogen will obtain the licence from MUIS for proprietary and confidential manufacturing technology for making Neogen’s electrolyte solutions at its manufacturing facility in India with a planned maximum installed capacity of upto 30,000 MT per annum,” the company said in an exchange filing.

The commercial production of the planned capacity is expected to start by 2025.

Shares of the Neogen Chemicals reacted positively to the news and shot up to an intraday high of Rs 1,492.60. At 9.35am, Neogen Chemicals was trading 4.17 higher at Rs 1,469.70 on the National Stock Exchange.

Around 35,000 shares of the company changed hands on the bourses so far, as against the one-month daily traded average of 33,000 shares.

Catch up on all LIVE stock market updates here

The agreement will also help Neogen’s manufacturing facility in complying with global regulations and accelerating approval processes with lithium-ion battery manufacturers. The agreement will enable Neogen to capitalise on the growing demand of lithium-ion batteries in India, while benefitting from the government’s production-linked incentive scheme for the segment.

Brokerage firm ICICIdirect believes this acquisition will help Neogen to strengthen its position in the electrolyte market in India. “The standardised Japanese technology can help improve battery performance, including power output and lifetime, with functional additives tailored to the purpose, which will ultimately led to gain customers confidence in domestic market,” the brokerage firm wrote in its note.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.?