Aether Industries inks pact with USA-based oil field company; stock zooms ~6%

8 Jun 2023 , 11:37 AM

Aether Industries Limited announced that it has signed a Letter of Intent (LoI) with a leading global Oil Field Services companies that is based in the USA towards the finalisation of a strategic supplier and contract manufacturing collaboration.

Following this development, the counter jumped as much as 10% in today’s trade at Rs 1,022 apiece.

At around 11.29 AM, Aether Industries was trading 5.81% higher at Rs 983.85, against the previous close of Rs 929.85 on NSE.

“The LoI sets tune to implement a strategic supply agreement (SSA) between both the companies. The SSA is expected to be finalized within a period of three months from the execution date of LoI,” said the company on Thursday.

As the first set of products in this new partnership, the LoI specifies 4 strategic products that will be contract manufactured by Aether.

The LoI also specifies the individual volumes of these four products, which total 1,325 MT per month (i.e. 16 KTA or 16,000 MT per year). These products will be delivered to the customer’s global energy and oil and gas locations, including a significant supply within India.

This new partnership has significant volume and revenue potential for Aether. Merely the first four products mentioned in the LoI can supply more than 1,000 MT per month, equating to top-line revenues for Aether in excess of USD 36 MM (Rs 300 crore) per year. The company expects to realize the initial revenue within 1 year of SAS execution.

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