IOL Chemicals and Pharmaceuticals Limited (IOLCP) announced three strategic business and capacity expansion projects aimed at strengthening its manufacturing base, entering high-value service segments, and expanding long-term partnerships with global customers. The company plans to invest approximately ₹495 crore across the three initiatives. Importantly, IOLCP will fund the entire expansion through internal accruals, avoiding additional debt for these projects.
Ibuprofen Capacity to Rise to 18,000 MTPA
As global demand for ibuprofen continues to grow, IOLCP plans to expand its manufacturing capacity at its Barnala facility in Punjab. The company will invest approximately ₹350 crore to establish a fully backward-integrated ibuprofen manufacturing unit with an additional capacity of 6,000 MTPA. IOLCP currently has an installed ibuprofen capacity of 12,000 MTPA, operating at around 95% utilisation. Once the new facility becomes operational, the company’s total ibuprofen capacity will increase to 18,000 MTPA. The expansion will leverage IOLCP’s existing backward-integrated manufacturing infrastructure. Consequently, the company expects to strengthen supply reliability while supporting growth opportunities in international markets. Commercial production is targeted to begin by December 2027.
IOLCP Expands into CDMO Manufacturing
Alongside its API expansion, IOLCP is entering the downstream pharmaceutical formulations segment through a dedicated Contract Development and Manufacturing Organisation (CDMO) facility at its Barnala site. The company has invested ₹110 crore, funded entirely through internal accruals, to establish the new facility. The unit will have an annual installed capacity of approximately 1,500 million tablets or equivalent Direct Compressible Grade volume.
The CDMO business will build on IOLCP’s existing API capabilities and focus on meeting the long-term contract manufacturing requirements of key customers in Europe. Furthermore, the facility has received the Certificate of GMP Compliance of a Manufacturer from Hungary’s National Centre for Public Health and Pharmacy, Directorate for Drug Inspection, following a successful regulatory audit. IOLCP expects the new CDMO facility to begin commercial operations in Q3 FY2027.
Specialty Chemicals Facility Under Long-Term Tolling Contract
The third initiative focuses on specialty chemicals. IOLCP is setting up a dedicated manufacturing facility for a specialty chemical product under an exclusive, long-term tolling agreement with a leading international chemical manufacturer. The project involves an investment of approximately ₹35 crore, which will also be funded through internal accruals. Under the agreement, the dedicated facility will manufacture and supply the specialty chemical directly to the international customer. This arrangement is expected to provide IOLCP with a predictable revenue stream while increasing its presence in higher-margin contract manufacturing. However, due to commercial confidentiality provisions, IOLCP has not disclosed the identity of the customer or the contracted volumes. Commercial production at the dedicated specialty chemicals facility is scheduled to begin in Q3 FY2027.
₹495 Crore Investment to Support Long-Term Growth
Through these three initiatives, IOLCP is expanding beyond its established API manufacturing base while strengthening its position in ibuprofen, CDMO services and specialty chemicals. The combined ₹495 crore investment, funded through internal accruals, will increase manufacturing capacity, expand value-added offerings, and strengthen the company’s relationships with international customers. As reported by equitybulls.com, with commercial operations planned between December 2027 and Q3 FY2027, the projects are expected to support IOLCP’s long-term growth across pharmaceutical and specialty chemical markets.
