Neogen Chemicals has received a third on-account insurance payment of ₹60 Crore following the fire incident at its Dahej Multi-Purpose Plant (MPP3) in March 2025. This brings the total on-account claim received to date to ₹140 Crore. The company continues to assess losses related to property, business interruption, and reinstatement value, while the replacement plant construction is proceeding rapidly for Q1 FY27 commissioning.
Insurance Update Following Plant Fire
Neogen Chemicals provided an update regarding the fire incident that occurred at its Multi-Purpose Plant (MPP3) facility, warehouse, and tank farms in Dahej SEZ on March 5, 2025. The company confirmed receipt of a third on-account payment of ₹60 Crore from the Insurance Company, based on the surveyors’ interim report.
This latest tranche raises the total on-account claim received so far to ₹140 Crore. Further settlement amounts concerning the loss of property, plant, equipment, business interruption, and reinstatement value will be determined across various stages following the completion of the comprehensive assessment.
Financial Impact and Asset Damage
The company has recognized a total estimated loss of ₹348.16 Crore (on a standalone basis) related to damage to P&PE and inventory. Consequently, an insurance claim receivable of ₹334.60 Crore has been recognized, calculated after factoring in applicable deductibles and claim admissibility.
On a net basis, after considering the recognized losses and receivables, the net impact on the balance sheet is estimated at ₹13.56 Crore. It is noted that the company has not yet accounted for claims related to loss of profit due to business interruption or the excess reinstatement value over written-down value, adhering to accounting conservatism.
Furthermore, the company has received ₹3.48 Crore to date from the sale of salvaged scrap.
Restoration and Business Continuity
The production and operation of the affected Multi-Purpose Plant (MPP3) facility, warehouse, and tank farms remain suspended temporarily. However, the construction of the replacement plant is advancing rapidly, with commissioning currently scheduled for Q1 FY27.
To mitigate the immediate impact on earnings and minimize business disruption, Neogen has strategically shifted production of critical specialty products to other operational sites, subject to customer approvals. This strategy, combined with the planned expansion at the Patancheru Plant, is expected to help stabilize future earnings.
Source: BSE
