Neogen Chemicals shares gain after arm signs JV for lithium-ion battery components

Shares of Neogen Chemicals Ltd. are in focus on Monday, September 1, after the company said the board of its wholly-owned subsidiary Neogen Ionics has approved the execution of a joint venture agreement (JVA) with Morita Chemicals Industries Co. Ltd.The objective of the JVA is to utilise the technological and manufacturing capabilities of both organisations and use these synergies to participate in the growing lithium-ion battery business, Neogen Chemicals said in an exchange filing.

Both parties will invest in Neogen Morita New Materials Ltd. (NML), the wholly-owned subsidiary of Neogen Ionics. The JVA was executed on Sunday, August 31, with both parties agreeing to invest in NML, provided that Neogen Ionics owns a minimum 80% of the share capital and Morita Investment will own a maximum of 20% of the share capital.

NML will produce, develop and sell solid LiPF6 salt, and other new materials, related products and services as may be decided as part of the JV, on the terms and conditions as mentioned.
The solid LiPF6 salt is a key ingredient for producing electrolyte used in lithium-ion batteries.In July, Neogen Chemicals’ board approved the raising of up to ₹200 crore via the issuance of fully-paid secured, listed, rated, redeemable, rupee-denominated, non-cumulative, non-convertible debentures (NCDs) on a private placement basis.

The tenure of the NCDs would be 36 months, with interest payable monthly.

Shares of Neogen Chemicals ended the previous session 2.6% lower at ₹1,400.8 apiece. The stock has declined 36.5% this year, so far.

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