Astral Limited has subscribed to Optionally Convertible Debentures (OCD) of Rs. 194 crore issued and allotted by Gem Paints Private Limited upon completion of its pre-closing conditions as per the terms of Debenture Subscription Agreement dated 29th April, 2022.

Further, the company has appointed majority directors on the board of Gem Paints Private Limited and Esha Paints Private Limited and control is established in terms of the aforesaid Debenture Subscription Agreement. Accordingly, Gem Paints Private Limited and Esha Paints Private Limited have become subsidiaries and step down subsidiaries of the company respectively in terms of the applicable provisions of the Companies Act 2013.

On 29th April 2022, Astral Limited had informed that as a part of the company's strategy to expand its product portfolio under the building material segment, the Board of Directors approved to acquire a 51% controlling equity stake in the operating paint business of Gem Paints Private Limited.

Astral shall initially invest Rs. 194 crore in Gem Paints Private Limited by subscribing to Optionally Convertible Debentures equivalent to the value of 51% equity stake of Operating Paint business of Gem Paints.

The Operating Paint Business of Gem Paints Private Limited is proposed to be demerged to a wholly owned subsidiary of Gem Paints Private Limited viz. Esha Paints Private Limited. Upon the completion of demerger, Astral will acquire 51% equity shares of Esha Paints Private Limited against the redemption of OCDs. The name of Esha Paints Private Limited is proposed to be changed to Gem Paints Private Limited under the demerger scheme.

The balance 49% equity stake will be acquired by Astral over a period of 5 years in tranches as per the Share Purchase Agreement entered between the parties.