Sigachi Industries shares crash 15% after explosion in Telangana Plant

Shares of Sigachi Industries Ltd plummeted by 15% during Monday's trading session, reaching Rs 47 per share on the BSE. This drop follows a reactor explosion at the Sigachi Pharma facility in Pasamailaram Phase 1, Medak district, Sangareddy, Telangana, which resulted in five fatalities and 13 injuries. The stock had settled at Rs 55.18 in the previous session.

The explosion prompted an immediate emergency response, with eleven fire tenders dispatched to control the blaze and stabilise the site. The injured were transported to nearby hospitals, though details on their conditions remain undisclosed. The cause of the explosion is under investigation, with no findings released yet.

Sigachi Industries is part of a group known for manufacturing pharmaceutical excipients and chemicals. The stock has lost a third of its value from its 52-week high of Rs 69.75 recorded in August 2024. This incident raises concerns over operational safety and could impact investor confidence adversely.

Sigachi Industries made headlines with its initial public offering (IPO) on November 15, 2021, where it debuted at Rs 575 on the BSE, a 252.8% premium over the issue price of Rs 163. The IPO raised Rs 125.43 crore and was subscribed 101.91 times during its sales period. The company planned to use these funds to expand its production capabilities in Gujarat and Andhra Pradesh.

VIDEO | Medak, Telangana: At least ten people dead after a fire broke out following a reactor explosion at Sigachi Chemical Industry in Pashamylaram.

(Full video available on PTI Videos - https://t.co/n147TvrpG7) pic.twitter.com/TgfWczjtoM

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Incorporated in 1989, Sigachi Industries focuses on manufacturing microcrystalline cellulose (MCC), widely used across the pharmaceutical, food, nutraceutical, and cosmetic industries. MCC serves as a key excipient in finished pharmaceutical dosages, highlighting the company's strategic importance in these sectors.

The broader implications of this incident may affect future production plans and investor sentiments. The company had aimed to expand its MCC production capacity and manufacture croscarmellose sodium (CCS) at its sites in Gujarat and Andhra Pradesh. Any delays or changes to these plans due to operational concerns could impact Sigachi's market standing and financial projections.