Intimation of Expansion of Industrial Gases Vertical and proposed Partial Utilization of Preferential Allotment Proceeds
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Hilltone Software and Gases Ltd plans to expand its Industrial Gases business using proceeds from a December 2025 preferential allotment of 22,47,800 equity shares issued at ₹44 each (₹10 face value + ₹34 premium). The company will add Carbon Dioxide (CO₂) and Argon gases to its existing Oxygen and Nitrogen portfolio, moving from third-party trading to in-house bottling. Capital expenditure includes 19 KL and 20 KL liquid storage tanks, around 500 gas cylinders, and a truck-mounted liquid gas tank for bulk transport. The expansion is expected to improve gross margins in the Industrial Gases vertical by roughly 25% and cut logistics costs by about 15%. Installation and commissioning are targeted for completion by May 2026, after which bottling operations for the new gases will begin.
Positive for shareholders — the company is deploying recently raised capital into a stated growth plan with clear margin and cost benefits, shifting from low-margin trading to in-house production. Successful execution by May 2026 could drive meaningful earnings improvement in the core Gases vertical, though execution and capex absorption risks remain.