This cooperation with one of the market leaders should bring...

This cooperation with one of the market leaders should bring things on track now. It's quite an amazing announcement, actually, because Grasim have successfully pulled off an eco-fibre based fashion brand before: Liva (livafluidfashion.com).

Grasim had a revenue figure of 561.6 billion INR (May 2018, source: Wikipedia). That's a whopping AU $11.73 billion. With that sort of company backing the project, Nanollose has a chance to become (part of?) a world leader.

One key aspect of the agreement is in this paragraph:
"The collaboration will provide Nanollose with a world class and globally recognised industrialpartner with the ability to accelerate development and commercialisation and provide amanufacturing foundation for future textile and clothing brands that uptake Nanollose’s Tree-Freefibres. An industrial fibre manufacturer was the last missing link needed to complete Nanollose’swaste to textile value chain."

Grasim, as aforementioned, have brought out an eco fibre based fashion brand before: Liva. And they've done very well. They're now in over 4000 stores, and that within just a few years (launch was in 2015). Nanollose can either create their own brands in a similar way with the help of Grasim, or they can supply to brands like Liva and others.

Currently, it seems like mostly eco-friendly brands are looking at alternatives. However, once the mainstream fashion industry jumps on the bandwagon, the demand for eco fibres will surge, not only in India. Nanollose will have a unique advantage of extremely short production cycles, and will thus be able to meet supply demands of behemoths like Nike as well. The ability to produce in a short amount of time will reduce a fashion brand's supply risk significantly. With the help of Grasim, Nanollose will be able to produce their microbial cellulose fibre by the tonne in a matter of a few weeks.

Today's fashion brands are also increasingly put under pressure to produce eco friendly garments. (See here, for example: https://goodonyou.eco/how-ethical-is-nike-e03/)

A couple of Liva links for reference:
https://www.fibre2fashion.com/news/textile-news/liva-receives-overwhelming-response-at-yfa-trade-expo-251604-newsdetails.htm (recent)

https://in.fashionnetwork.com/news/Liva-to-expand-to-4000-outlets-this-year,695403.html

https://in.fashionnetwork.com/news/Birla-cellulose-brand-liva-enters-international-markets-eyes-tie-up-with-global-fashion-brands,887882.html

"Grasim Industries which owns Birla Cellulose had posted consolidated revenue of Rs 1,997 crore (approx $308 million) in the last quarter from its viscose staple fibre (VSF) segment. Birla Cellulose launched Liva, the lone branded viscose fabric in India, in 2015. It currently caters to the needs of apparel brands like Madura Fashion and Lifestyle, Fashion Big Bazaar, Lycra and Spandex Zara and H&M, among many others."

Of course, we are still talking "potential" here until things get going and actual revenue flows in. But given how far Nanollose have come and what deals are being made, this company is already breaking new ground in the textile/fibre industry. At a market cap of A $6m, this could be one of the rare investment opportunities not to miss out on.

To be honest, I am glad I hadn't heard about Nanollose until a few months ago because when I first heard of them, I was able to buy in at current price levels. But given the potential here, I would think that even those investing during the IPO will end up with a substantial profit. The risk/reward ratio here seems exceptional.

Given the financial position, I would think that a cap raise is around the corner, but likewise Grasim and other institutional investors might be eyeing an investment now, so any cr might not be accessible to retail shareholders. Regardless, there could be an opportunity to accumulate or buy in at a long term low. And within the next 5 years, who knows how far this could go.

One more thought/question: Would Nanollose potentially receive a payment for the fact that the agreement is exclusive?