IOL Chemicals and Pharmaceuticals Ltd. has announced plans to invest around ₹495 crore to expand its ibuprofen manufacturing capacity at its existing facility in Barnala, Punjab. According to the latest announcement, the company is setting up a new fully backward-integrated unit with an annual capacity of 6,000 metric tonnes. This expansion will increase IOL Chemicals' total ibuprofen capacity to 18,000 MTPA from 12,000 MTPA currently, representing a 50% capacity increase from the current levels. The existing facility is currently operating at around 95% capacity utilisation, highlighting the urgent need for expansion to meet growing global demand and improve supply reliability. The project is expected to be commercialised by December 2027 and will be funded entirely through internal accruals.
The project will be funded through internal accruals and is expected to be commissioned by December 2027. As reported by CNBC TV18, IOL Chemicals' existing ibuprofen facilities are currently operating at around 95% capacity, highlighting the urgent need for expansion. The new unit is specifically aimed at meeting growing global demand and creating room for the company to pursue additional business in international markets, with the expansion expected to strengthen its position as an ibuprofen manufacturer. The pharma CDMO facility and specialty chemicals plant are expected to commercialise during Q3 FY27, meaning they could begin contributing relatively earlier than the ibuprofen expansion.
Beyond ibuprofen expansion, IOL Chemicals has commissioned a pharmaceutical formulation plant at its Barnala site, marking its entry into contract development and manufacturing (CDMO) for pharmaceutical formulations. According to the latest announcement, the facility has installed capacity of approximately 1,500 million tablets per annum, or equivalent volume of Direct Compressible Grade material, built at an estimated cost of ₹110 crore using internal accruals. The plant has completed regulatory inspection and received GMP compliance certificate from Hungary's National Centre for Public Health and Pharmacy, with commercial operations expected to begin during the third quarter of FY27. The facility will serve the long-term manufacturing needs of anchor customers in Europe, with the new formulations business established mainly to serve the long-term contract manufacturing requirements of its anchor customers in Europe.
IOL Chemicals is also establishing a dedicated facility to manufacture specialty chemicals for a leading global chemical company under a long-term tolling arrangement. As reported by CNBC TV18, the project involves an estimated investment of ₹35 crore and will be funded through internal accruals. Under the agreement, IOL Chemicals will manufacture and supply the specialty chemical exclusively to the customer, with commercial production expected to begin during the third quarter of FY27. The company stated this arrangement should provide steady, long-term demand for the product and contribute materially to revenue once commercial supplies begin, while expanding its presence in specialty chemicals and contract manufacturing. Unlike a generic capacity addition, this plant is being built specifically to fulfil the requirements of a particular global customer, making the project more demand-linked than a speculative greenfield expansion.
IOL Chemicals shares were trading 0.75% lower at ₹209.40 on Wednesday at 2:45 p.m., according to CNBC TV18. Despite the recent decline, the stock has gained 24.7% over the past month and 154.7% so far this year, demonstrating strong investor confidence in the company's expansion strategy and growth prospects in the pharmaceutical and specialty chemicals sectors. The company's diversification strategy across three different growth engines - ibuprofen expansion, pharma CDMO services, and specialty chemicals manufacturing - positions it for broader market opportunities while reducing concentration risk in any single segment.
