Solar Industries India Ltd. announces an acquisition

Funding is confirmed as a combination of debt and internal accruals, with no equity issuance. However, management did not disclose a percentage split between debt and internal accruals. The proposed structure is to use Omnia’s cash surplus, raise debt at Omnia, and fund any remaining shortfall through the acquiring Solar group entity. Management said the transaction would be managed through “internal accrual and debt” and that no equity dilution was planned. ^{[1] [2]}

Leverage and coverage impact

• Leverage target: Management expects consolidated debt, including acquisition debt and regular debt, to be around Rs 10,000-11,000 Crores by FY28 against EBITDA of approximately Rs 6,800-7,000 Crores. It expects net debt-to-EBITDA to remain below 2.0x. ^[3]
• Net debt-to-equity: The conference call did not disclose a post-acquisition net debt-to-equity ratio. A separate market report projects consolidated net debt-to-equity at approximately 1.2x in FY28, declining to 0.8x in FY29 and 0.5x in FY30; this is an external projection, not a ratio explicitly provided by management in the call. ^[4]
• Interest coverage: Management indicated FY27-FY28 EBIT of roughly Rs 6,200-6,300 Crores and interest cost of Rs 1,000-1,100 Crores. On a derived EBIT/interest basis, this implies interest coverage of approximately 5.6x-6.3x. ^[5]

The key takeaway is that management is accepting a meaningful initial increase in borrowings but expects internal cash generation and the combined earnings base to keep leverage below 2.0x EBITDA. The call provides a debt-service framework, but not a formally stated net debt-to-equity target or a fixed funding percentage split.

Management quantified revenue and EBITDA outcomes, but did not provide a separate rupee estimate for procurement, logistics, headcount, or other cost savings.

• Revenue opportunity: African mining revenue was expected to increase from approximately USD 300 million to USD 900 million–1 billion as Solar’s operations are combined with Omnia/BME’s African platform. This is a combined-market growth target rather than a separately isolated synergy. ^[6]
• Combined FY28 scale: Solar and Omnia were projected to generate approximately Rs 31,000–32,000 Crores of revenue and Rs 6,800–7,000 Crores of EBITDA, implying a consolidated EBITDA margin of roughly 22%–23%. ^{[1] [3]}
• EBITDA synergy bridge: Management estimated the combined entity at approximately Rs 6,600–6,700 Crores of EBITDA before synergy benefits, rising to around Rs 7,000 Crores after synergies and operational efficiencies. This implies a derived incremental EBITDA contribution of roughly Rs 300–400 Crores, although it was not presented as a standalone, audited synergy number. ^[3]
• BME margin uplift: BME’s EBITDA margin was cited at approximately 13%–14%, with potential to reach 18%–19% over three to four years through ammonium-nitrate integration, Solar’s initiating-systems sales, and ProBlast’s down-the-hole services. ^[6]
• Nature of cost benefits: The call described supply security, improved raw-material availability, vertical integration, operational flexibility and greater cost competitiveness, but did not quantify these benefits separately. ^[7]

Timeline: Management said the enlarged footprint and revenue benefits should become increasingly visible from FY28, while the more specific margin improvement at BME was framed as a three-to-four-year progression toward the 18%–19% range. Therefore, the expected sequence is initial revenue and EBITDA contribution by FY28, with fuller margin accretion developing over the following three to four years. ^{[8] [6]}

The cited transaction disclosure identifies only broad closing conditions: regulatory approvals, competition approvals, and Omnia shareholder approval. It does not name the specific competition commissions or jurisdictions involved. Completion was described as expected in early to mid-2027 ^[9].

That expected window is not the same as a contractual long-stop date. The cited material does not state management’s long-stop date for completion, so the exact date and authority-by-authority critical path cannot be reliably established from the available excerpts.