Navin Fluorine surges 17% on multi-year contract with a global company

The Company has entered into a $ 410 million (approx. Rs 2,900 crore) multi-year contract with a global company for manufacture and supply of a high performance product in the fluorochemicals space.

Shares of Navin Fluorine International surged 17 per cent to Rs 1,425 on the BSE in an otherwise subdued market on Tuesday after signing of a multi-year contract with a global company for $ 410 million (approx. Rs 2,900 crore).

The stock of the fluorochemical maker hit a new high today. It has rallied 26 per cent in the past two weeks, as compared to a 2.5 per cent decline in the S&P BSE Sensex. In the past six months, the stock has more than doubled from level of Rs 686, against a 10 per cent rise in the benchmark index.

“The Company has entered into a $ 410 million multi-year contract with a global company for manufacture and supply of a high performance product (HPP) in the fluorochemicals space. The project will entail an investment of about $51.50 million (Rs 365.50 crore) in the manufacturing facility and $10 million (Rs 71 crore) in captive power plant,” Navin Fluorine International said in a press release. 

The Company will execute this capex and the project through its wholly-owned subsidiary, Navin Fluorine Advanced Sciences Limited and will be located at Dahej, in Gujarat and will be funded through a mix of internal accruals and debt. The supplies are expected to commence from Q4 of FY22, it added.

The management said this is beginning of the company’s entry into higher value HPP segment and shall continue to add more products in this segment.

Meanwhile, the board of directors has declared an interim dividend of 200 per cent or Rs 4 per share of the face value of Rs 2 each for the financial year 2019-20. The company has fixed March 6, 2020 as the record date for ascertaining entitlement for the payment of aforesaid interim dividend.