Astral has unveiled a major corporate restructuring plan that could reshape how investors value the company, with its Chemicals business set to be carved out into a separate entity, Astral Chemie.

 

In an exchange filing, the company said its Board has approved a Composite Scheme of Arrangement to demerge the Chemicals business on a going-concern basis, transferring all related assets and liabilities into the new entity. 

 

The plan also includes the amalgamation of Al-Aziz Plastics Private Limited with Astral Ltd. Shareholders will receive “one equity share of Astral Chemie Ltd. of face value Re 1 each, fully paid-up, for every one equity share of face value Re 1 each, fully paid-up, held in Astral Ltd.”

 

Market participants say the move could be a turning point in how the stock is priced.

 

“As per our understanding, the key rationale behind this announcement is that the Chemicals business has reached a level wherein it can chart its own growth strategy and fund its future separately from the Plumbing business. Demerger is expected to become effective after 9-12 months and it should eliminate any conglomerate discount thereby allowing valuation of each demerged business independently,” Equirus Securities said.

 

Post separation, Astral expects the Plumbing business to be benchmarked against peers like Supreme and Finolex, while the Chemicals and Paints arm would be compared with adhesive-focused companies such as Pidilite.

 

In FY26, the Plumbing segment reported revenues of Rs 46.8 billion with EBITDA of Rs 9.2 billion, while the Adhesive and Paints business generated Rs 18.9 billion in revenue and Rs 1.9 billion in EBITDA. The turnover of the demerged undertaking’s India business stood at Rs 12.66 billion.

 

The company said the restructuring is aimed at sharpening focus, improving capital allocation, and unlocking shareholder value through more transparent business segmentation and independent governance structures.

 

Astral added that its Chemicals portfolio spans adhesives, PVA, cyanoacrylates, solvent cements, silicone sealants, epoxy resins, construction chemicals, putties, and allied products, along with recent forays into specialty chemicals through acquisitions. The integration with its paints and coatings business, it said, will create a dedicated platform with sector-specific leadership.

 

Management expects the separation to allow each business to independently pursue expansion, product development, market entry, acquisitions, and partnerships without competing capital priorities under a single corporate structure.