Pioneer Jellice and Ashok Matches launch open offer for IGCL stake acquisition

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Madurai-based Pioneer Jellice India Pvt Ltd (PJIP) and Ashok Matches and Timber Industries (acquirers) have issued an open offer to acquire 18.43 lakh equity shares (26 per cent) of ₹10 each for cash at ₹408.90 per share to the public shareholders of Mumbai-based India Gelatine & Chemicals Ltd (IGCL). The total consideration for this will be ₹75 crore.

In a separate transaction, on December 4, Narmada Gelatines Ltd, a subsidiary of Pioneer Jellice, purchased 10.03 lakh shares at ₹408 per share of India Gelatine for a total value of ₹40 crore. This forms 14.01 per cent of the issued and paid-up capital of India Gelatine.

In addition, PJIP acquirers and IGCL signed a share purchase agreement on December 5 to acquire 27.95 lakh shares (39.42 per cent) at a price of ₹408.90 for a total consideration of ₹114 crore.

The transactions triggered the open offer by the IGCL acquirers, as the proposed acquisition exceeded 25 per cent.

In 2023, PJIPL acquired 75 per cent of Narmada Gelatines Ltd. for a total value of ₹103 crore.

PJIP is a company that manufactures gelatin, di-calcium phosphate, and other products for food and pharmaceutical applications. It was established in 1991 as a joint venture between Pioneer Asia Group and Jellice Co. Ltd. and is located in Cuddalore, Tamil Nadu.

Narmada Gelatines Ltd (erstwhile Shaw Wallace Gelatines Ltd), established in 1961 in Madhya Pradesh, manufactures ossein and gelatin. For the fiscal year ending March 31, 2024, the company reported a net profit of ₹15.33 crore on revenue of ₹182 crore.

IGCL produces gelatine in Vapi, Gujarat. In 1975, the promoters produced ossein (the raw material for gelatine) from crushed bones and exported it to Japan with a technical collaboration with Konica Gelatin Corporation of Japan. For the fiscal year ended March 31, 2024, it reported a net profit of ₹28 crore on revenue of ₹206 crore.

IGCL’s product line is suitable for consumption in halal and international markets, which has opened the door to export to the US, the EU, Japan, Korea, the Middle East, and Indonesia.

On the BSE, the share price of India Gelatine closed at ₹419.90, up by ₹40.05 or 10.54 per cent, while Narmada Gelatines’ share price closed at ₹394, up by ₹24.95 or 6.76 per cent.