The Chemical Industry:

Possibilities for India

MAY
2020
Valuation
Investment Banking
Restructuring
Transaction Services
Transaction Tax
Content
 Overview of
Chemical Industry
1 Page No. 04

2
Global
Chemical Industry Page No. 07

3
Indian
Chemical Industry Page No. 11

4
Basic
Chemicals Industry Page No. 19

5
Specialty
Chemicals Industry Page No. 29

6
Agro
Chemicals Industry Page No. 35

7
Transacted
Deal Multiples Page No. 39

8
Market Data
Trend Analysis Page No. 42

9
Opportunities in Indian
Chemical Industry Page No. 49

Trends Shaping Indian

Chemical Industry and the
Way Forward
10 Page No. 51
 1
Overview
of Chemical
Industry
Overview of Chemical Industry
The Chemical Industry is a key contributor to the world
economy. It is a knowledge based industry with
significant investment in research and development. In
terms of consumption, chemical industry is its own
largest consumer. In most cases, basic chemicals
undergo several processing stages to be converted
into downstream chemicals. These in-turn are used for
industrial applications, agriculture, or directly for
consumer market.
Growth in revenue within the chemical industry
depends largely on the overall growth of the economy
and industrial production, and is often measured as a
multiple of GDP growth.
According to the American Chemical Council, over
96% of all manufactured goods are dependent in some
way on the chemical industry. Chemicals are used to
make a wide variety of consumer goods, as well as
inputs to agriculture, manufacturing, construction, and
service industries. Major industrial customers include
rubber and plastic products, textiles, apparel,
petroleum refining, pulp and paper, and primary metals.
Chemicals, such as organic and inorganic chemicals,
bulk petrochemicals, other chemical intermediates,
plastic resins, synthetic rubber, man-made fibres, dyes
and pigments, printing inks, are basic chemicals.
These are also known as commodity chemicals
Specialty chemicals are driven by extensive product
R&D and innovation, which is a significant differentiator
over the commoditized chemical industry. These
chemicals are derived from basic chemicals and are
sold on the basis of their functions. For example,
paints, adhesives, electronic chemicals, water
management chemicals, oilfield chemicals, flavours
and fragrances, rubber additives, paper additives,
industrial cleaners and fine chemicals, sealants,
coatings, catalysts etc. come under this category.
Agrochemicals are those which are meant for
protecting agriculture crops against insects and pests.
As on 2018, Indian exports of agrochemicals have
shown an impressive growth over the last five years.
India is the 4th largest producer of agrochemicals after
USA, Japan and China
The Chemical Industry: Possibilities for India 05
Overview of Chemical Industry

Chemical Industry

Basic Specialty Agro- Pharmaceuticals /

Chemical Chemical Chemical knowledge
Chemicals*

includes paints,
adhesives, water includes manufacturing
management chemicals, medicines, hospital
includes petrochemicals, flavours and fragrances, supplies and consumer
chlor- alkali chemicals sealants, coatings, includes insecticides health products such as
and dyes and pigment catalysts etc and pesticides ointments and creams

Analyzed in the
research report

*Due to its nature excluded in the report The Chemical Industry: Possibilities for India 06
 2
Global Chemical
Industry
Global Chemical Industry

Global Chemical Industry Revenue

USD IN BILLION

of 3.9%

5,418
AGR

5,226

5,198
5,157
5,000
C 4,911

4,250

4,083
4,125
3,843

3,448
3,373
2,924
2,653
2,375

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Statista

Country-wise Chemical Industry Revenue in 2018

USD IN BILLION

China

EU

NAFTA***

Rest of Asia**

Japan

Rest of Europe*

South Korea

Latin America

India

Africa

Rest of World

- 200 400 600 800 1,000 1,200 1,400 1,600

*Rest of Europe covers Switzerland, Norway, Turkey, Russia and Ukraine Source – Cefic
**Asia cover excludes China, India, Japan and South Korea
***North American Free Trade Agreement

The Chemical Industry: Possibilities for India 08

Global Chemical Industry

Top 10 Global Chemical Companies by Revenue

10.Toray USD IN BILLION

9.Air Liquide,
Industries, 21.3
France, 24.0
1. BASF,
8. LG Chem, South Germany, 68.5
Korea, 24.3

7.Linde,
Germany, 27.0
2.Bayer,
Germany, 50.2
6. Mitsubishi
Chemical, Japan,
35.2

3.Dow U.S., 47.4

5. LyondellBasell,
Netherlands,
35.4 4.Du Pont Source: Statista, 2019
Nemours, US, 36.4

Key Highlights

The global chemical industry contribution to the Global GDP in 2017 is USD 5.7 trillion.
Size
This is equivalent to 7% of the world’s GDP for 2017.

Key Players Industry is highly fragmented; the top 5 players account for ~ 8% of the global market

Source – ICCA

The Chemical Industry: Possibilities for India 09

Global Chemical Industry - Statistics

Countries exporting highest dollar Countries exporting highest dollar

value worth of chemicals in 2018 value worth of organic chemicals in 2018

% of Global % of Global
Rank Particulars USD in bn exports Rank Particulars USD in bn exports
  World 581.8     World 450.1  
1 China 80.0 13.8% 1 China 59.8 13.3%
2 United States 52.0 8.9% 2 United States 40.2 8.9%
3 Belgium 41.0 7.0% 3 Belgium 37.7 8.4%
4 Germany 36.0 6.2% 4 Ireland 33.1 7.4%
5 Ireland 34.0 5.8% 5 Germany 26.9 6.0%
6 South Korea 30.0 5.2% 6 South Korea 25.4 5.6%
7 Netherlands 30.0 5.2% 7 Netherlands 25.1 5.6%
8 Japan 24.0 4.1% 8 Switzerland 20.8 4.6%
9 Switzerland 21.0 3.6% 9 Japan 18.9 4.2%
10 India 19.0 3.3% 10 India 17.7 3.9%

Countries exporting highest dollar

value worth of inorganic chemicals in 2018

% of Global
Rank Particulars USD in bn exports
  World 131.7  
of the above countries, fastest growing
1 China 20.2 15.3% exporter since 2014 is India (+47%), China
2 United States 12.5 9.5% (+32%), Ireland (+25%) and South Korea (+10%)
3 Germany 9.3 7.1%
4 Australia 8.2 6.2%
5 Japan 5.8 4.4%
6 Netherlands 5.6 4.3% of the above countries, decline was posted in
7 South Korea 5.5 4.2% exports since 2014 in Germany (-19%), France
8 Brazil 4.2 3.2% (-12%), Japan (-9%) and United States (-4%)
9 Belgium 4.0 3.0%
10 France 3.7 2.8%

Source: Worldstopexports The Chemical Industry: Possibilities for India 10

 3
Indian Chemical
Industry
Indian Chemical Industry

Chemical Industry in India has broadly grown at ~11% CAGR over

the last decade Vs a nominal GDP growth of ~9% (in USD terms)

Consumption Driven Demand: Per capita consumption of chemicals in India is 1/10th

of the worlds average. This makes India an attractive destination for investment and
growth
Growth Drivers
Rising Middle Class Population: By 2030, 23% of the global middle class will most
likely be Indian supporting strong demand for Specialty chemicals in the automotive,
personal products, water treatment and construction segment

100% FDI is permissible in Chemical Industry

Govt. Policies
Manufacturing of most of the chemical products is delicensed except few chemicals
because of their hazardous nature.

Government initiatives like Swachh Bharat Abhiyan is supporting chemical industry

especially in companies dealing in surfactants and water treatment chemical
manufacturing

Other initiatives Setting up of Petroleum, Chemical and petrochemical Investment regions and setting
up of plastic parks

Another focus on area of smart cities, is likely to support construction chemical

industry

Employs more than 2 million people

Covers more than 70,000 commercial products

Source – IBEF The Chemical Industry: Possibilities for India 12

Indian Chemical Industry -
Highlights

The Indian Chemical Industry is valued at USD 163 billion in FY 18

Size
The domestic chemical sector (other than fertilizer) attracted FDI investment of USD
1.3 billion in FY 18, which is about 3 per cent of the total FDI inflow.

Industry growth will be driven by rising demand in end-use segments for Specialty
chemicals and petro chemicals intermediaries.
Growth
Indian Chemical industry is expected to grow at 9% pa and reach USD 304 billion by
FY 2025

Highlights Based on output, Indian Chemical Industry is 3rd largest in Asia and 6th largest Globally

Key Players

Indian Chemical Industry account for 7% of India’s GDP and 14% of overall IIP

India contributes 3% to global chemicals Industry

Source – IBEF The Chemical Industry: Possibilities for India 13

Indian Chemical Industry -
Highlights

Installed Capacities & Production of Major Chemicals (‘000 MT)

Average capacity utilization is 76.8%

13929
13452
13078
12768
12493

11068
10234
9884
9660
9643

2 0 1 3- 1 4 2 0 1 4-1 5 2 0 1 5-1 6 2 0 1 6-1 7 2 0 1 7-1 8

Installed Capacity Production

FY18 Share of Installed Capacity of Major Chemicals

2% 4%

18% Alkali Chemicals

Inorganic Chemicals

Organic Chemicals
9% Pesticides

67% Dyes & Pigments

FY18 Share of Production of Major Chemicals

2% 3%

16%
Alkali Chemicals

Inorganic Chemicals

Organic Chemicals
10%
Pesticides
69%
Dyes & Pigments

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 14
Indian Chemical Industry -
Highlights

Total Major Chemicals – Export & Imports (USD mn)

CAG R of 2.3%
Net Export

5,273
4,637
4,369

4,199

3,988
4,021
3,289
3,196

3,177
2,912

2 0 1 3-1 4 2 0 1 4-1 5 2 0 1 5-1 6 2 0 1 6-1 7 2 0 1 7-1 8

Total Import Total Export

FY18 Share of group under total import – Major Chemicals

9% 10%
Alkali Chemicals
12% Inorganic Chemicals
22%
Organic Chemicals

Pesticides

47% Dyes & Pigments

FY18 Share of group under total export – Major Chemicals

3% 3%

9% Alkali Chemicals

Inorganic Chemicals
42%
Organic Chemicals

Pesticides
43%
Dyes & Pigments

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 15
Indian Chemical Industry -
Highlights

Installed Capacities and Production of Petrochemicals (‘000 MT)

2.8% 3.8%
CAGR of CAGR of
41,860
41,988
41,554
39,425
37,503

36,427

36,813
35,754
32,227
31,693

INSTALLED CAPACITY PRODUCTION

FY14 FY15 FY16 FY17 FY18

Petrochemical Imports and Exports (USD bn)

GR of 1.5%
Net Import CA
14.6
14.1
13.6

13.1
12.3

7.6
7.0

5.7

5.5
5.1

FY14 FY15 FY16 FY17 FY18

Import Export

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 16
Indian Chemical Industry -
Highlights

Key Chemical & Petrochemical Products Exported in FY18 (USD mn)

Paraxylene 1,542

Polyester Filament Yarn 1,123

Benzene 1,018

Polyester Chips 1,007

Pigment Emulsion 678

Herbicides 654

Reactive Dyes 635

Polypropylene 611

Other Insecticides 605

Other Fungicide 506

- 200 400 600 800 1,000 1,200 1,400 1,600 1,800

Key Chemical & Petrochemical Products Imported in FY18 (USD mn)

Poly Vinyl Chloride 1,728

High Density Polyethylene 1,293

Polypropylene (Inc. Co-Polymer) 1,172

Styrene 1,007

Mono Ethylene Glycol 899

Para xylene 775

Methanol 615

Low Density Polyethylene 613

Linear Low Density Polyethylene 516

Nylon-6 461

- 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 17
Indian Chemical Industry -
Highlights

Returns to Shareholder for 5 years period ending 31 March 2020 vis-à-vis NIFTY 50 Return

200%

150%

100%

50%

0%

-50%
Chemical Industry Nifty 50

Companies forming part of the Chemical Industry Index includes:

Rallis India Limited Gujarat Alkalies & Chemicals Kansai Nerolac Paints Limited
Insecticides India Limited Reliance Industries Limited Pidilite Industries Limited
UPL Limited GAIL India Limited Sudarshan Industries Limited
PI Industries Limited NOCIL Limited Clariant Chemicals (India) Limited
Tata Chemicals Limited Asian Paints Limited Bodal Chemicals Limited
GHCL Limited Berger Paints Limited

Source – Capital IQ, RBSA analysis The Chemical Industry: Possibilities for India 18
 4
Basic Chemicals
Industry
Basic Chemicals Industry -
Overview

Basic chemicals (bulk chemicals) are a group of chemicals that are made on a very large scale and act as intermediates
to produce other chemicals, which, in turn are used to produce an extensive range of end-user products including
construction materials, adhesives, plastics, apparel and tires.

These chemical are very low in product differentiation, and hence making price the dominant economic factor in
purchasing decisions for the end users.

Alkali chemicals had the largest share in the Chemical industry in India with approximately 69% share in the total
production.

Basic Chemicals

Petrochemicals Chlor-Alkali Chemicals Dyes and pigment

Polymers Caustic Soda

Synthetic Fiber Liquid Chlorine

Performance Plastics Soda Ash

Synthetic Detergents
Intermediates

Synthetic Rubber

The Chemical Industry: Possibilities for India 20

Basic Chemicals Industry -
Segments

Petrochemical Industry

Size Petrochemicals constitute 40% of the world chemical market

Demand for petrochemicals has grown at a CAGR of 5.4% during FY15-FY18

Growth
The petrochemical demand is expected to grow at a CAGR of 7.5% from FY 19 to FY 23

Globally, a lower GDP environment, driven partly by US-China trade war, there was
reduction in consumption of base chemicals
Key Trends
In India, the emerging trend is the integration of refineries with downstream
petrochemical units

Key Players

Source – www.investindia.gov.in

Polymers Consumption of Polymers in India (‘000MT)

Synthetic polymers commonly called as plastics 7.0%

have transformed our lives in few decades CAGR of
14,000 12,703 12,839
12,055
The production of polymers has increased from 12,000 10,391
9,576 9,813
approx. 6,300 thousand MT in 2010-11 to 9,280 10,000 8,522
8,021
thousand MT in 2017-18 (CAGR of 5.58%) 8,000
6,000
~37% of domestic demand of polymers is met 4,000
through import. Major product which are
2,000
imported includes High Density Polyethylene,
-
Polypropylene, Poly Vinyl Chloride etc
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

India is currently 3rd largest consumer of Source – Department of Chemicals & Petrochemicals

polymers behind China and USA

The Chemical Industry: Possibilities for India 21

Basic Chemicals Industry -
Segments

Synthetic Fiber

Synthetic are fibers made by humans through Consumption of Synthetic Fiber in India (‘000MT)
chemical synthesis, as opposed to natural fibers
that are directly derived from living organisms.

1.1%
Common synthetic fiber includes: nylon, 4,000 CAGR of
modacrylic, olefins, acrylic, and polyester.
2,880 2,944 2,854 2,884
3,000 2,672 2,521 2,507
2,405
The production and installed capacity of synthetic
fiber in FY18 has increased at a CAGR of 3.6% 2,000
and 2.8% respectively.
1,000

India is a net exporter of synthetic fiber. During

-
FY18, 28% of the production of synthetic fiber is FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
exported.
Synthetic Fiber

Performance Plastics Consumption of Performance Plastic

in India (‘000MT)
Major components in this segment includes
Polyethylene terephthalate commonly CAGR -
abbreviated as PET Chips / Polyester Chips. negative
3.2%
~30% of global demand for PET Chips is from 1,700 1,565 1,542 1,593 1,521 1,577
plastic bottles production. 1,400 1,275 1,244 1,251
1,100
In FY18, India has a Installed capacity of approx.
2800 thousand MT for performance plastics and 800
the capacity utilization was around 61% 500

200
Major portion of domestic production is exported FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
(~61%)
Performanc e Plastics

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 22
Basic Chemicals Industry -
Segments

Synthetic Detergent Consumption of Synthetic Detergent Intermediates

Intermediates in India (‘000MT)
Synthetic Detergents / Surfactants are used to
improve cleaning efficiency, wetting or dispersing 7.2% 947
R of
1,000
CAG
actions, foaming/de-foaming and lubricity of 885
cleaning agents and other products. 774
800
704 687 702
655
Few players in this sector are Godrej Industries, 583
600
Aarti Industries, Galaxy surfactants

~22% of domestic demand for synthetic 400

detergent intermediates is met through import.
Imports for this item showed increasing trend in 200
general with a CAGR of 13.6% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Synthetic detergent

Synthetic Rubber Consumption of Synthetic Rubber in India (‘000MT)

Synthetic rubber is an artificial elastomer. This are

made from various petroleum-based monomers.
7.0%
The most prevalent synthetic rubber is
900
AG R of 807
864

800
C 795
styrene-butadiene rubbers (SBR), Polyisoprene, 724
672
Chloroprene. 700
604
600 571
537
Synthetic rubber has uses in the automotive 500
industry for tires, door and window profiles, belts,
400
matting, and flooring.
300

~70% of domestic demand for synthetic rubber is 200

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
met through import
Synthetic Rubber
Net import has grown at a CAGR of 3.0%
between the period FY 11 to FY18

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 23
 Basic Chemicals Industry -
Segments

Petrochemicals : Key Players In India

Reliance Industries Limited is GAIL India Limited is engaged in Haldia Petrochemicals Limited
engaged in refining petroleum activities, including manufactures and supplies
products and petrochemicals, polymers and chemicals.
including manufacturing of basic transportation through pipeline;
chemicals, fertilizers and nitrogen The company’s polymers include
compounds, plastic and synthetic manufacture of basic chemicals,
fertilizer and nitrogen polypropylene and
rubber.
compounds, plastics and polyethylene, including high
synthetic rubber in primary forms; density polyethylene (HDPE) and
Petrochemical segment includes
linear low density polyethylene
production and marketing
extraction of crude petroleum; (LLDPE).
operations of petrochemical
products, including It also manufactures chemicals for
extraction of natural gas, and industrial products, including
Polyethylene,
Polypropylene, electric power generation, benzene
Polyvinyl chloride, transmission and distribution. butadiene
Poly butadiene rubber Carbon black feedstock
Petrochemicals segment includes Cyclopentane
Butadiene
production and marketing of
Acrylonitrile
petrochemical product such as
Caustic soda
Polyethylene
In FY2019, the Company had a 37.7 Polypropylene
MMT petrochemical production,
highest ever.

Metric INR Cr Metric INR Cr Metric (INR Cr) FY 19

Total Revenue (TTM-Dec 2019) 6,11,250 Total Revenue (TTM-Dec 2019) 73,651 Revenue (FY19) 10,670

Total Revenue (FY19) 6,22,809 Total Revenue (FY19) 75,126 EBITDA (FY19) 1630

Petrochemical Segment Revenue (FY19) 1,72,065 Petrochemical Segment Revenue (FY19) 6,704 EBITDA Margin (FY19) 15.3%

Petrochemical Segment EBIT (FY19) 32,173 Petrochemical Segment Revenue (FY19) 385

Petrochemical Segment EBIT Margin (FY19) 18.7% Petrochemical Segment EBIT Margin (FY19) 5.7%

Source – S&P Capital IQ; Company Data; India Rating The Chemical Industry: Possibilities for India 24
 Basic Chemicals Industry -
Segments

Chlor-alkali Chemicals

Chlor Alkali chemicals play a key role in supplying chemicals to other manufacturing sectors such as textiles, pulp &
paper, alumina, soaps & detergents, pharma, etc.

The main products in the chlor alkali industry comprises of soda ash , caustic soda and liquid chlorine.

Installed Capacity and Production of Consumption of Soda Ash

Chlor-Alkali Products in FY18 in India (‘000 MT) in India (‘000 MT)
5.0%
CAGR of
2,990

3,336

2,742
3,646

2,474

3,244

3,652
3,049

3,160

3,198
2,877
1,899

2,599
2,589

SODA ASH CAUSTIC SODA LIQUID CHLORINE FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Installed Capacity Production

Consumption of Caustic Soda Consumption of Liquid Chlorine

in India (‘000 MT) in India (‘000 MT)

%
CAGR of 3.7 CAGR of 2.1
%
3,004
2,906
2,809

2,935
2,620

1,896
2,619
2,539
2,329

1,796
1,709
1,717
1,694
1,670
1,654
1,636

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 25
 Basic Chemicals Industry -
Segments

Chlor-alkali Chemicals : Key Players In India

Tata Chemicalls Limited is a Gujarat Alkalies and Chemicals GHCL Limited is engaged in the
manufacturer of soda ash and Limited offers Caustic Soda Lye and business of manufacturing and
sodium bicarbonate for diverse Caustic Soda Flakes. trading of inorganic chemicals,
industries, such as glass, home textiles and wind power
detergents, silicates, textiles, food, The Company's products include generation.
pharmaceuticals, animal feed, Caustic Soda
mining and chemical processing. Chlorine Business Segments
Hydrochloric Acid Chemicals includes Soda Ash
Business Segments Hydrogen (Anhydrous Sodium Carbonate)
Chloromethanes and sodium bicarbonate (baking
Inorganic Chemicals, which
Potassium Hydroxide soda).
includes soda ash, salt, sodium
Potassium Carbonate
bicarbonate, marine chemicals,
Sodium Cyanide Textiles operations include
caustic soda and cement;
Sodium Ferro Cyanide spinning of fiber, weaving, dyeing
Hydrogen Peroxide and printing till the finished prod-
Fertilizers, which includes fertilizers
Sodium Chlorate ucts, such as sheets and duvets.
and other traded products;
Stable Bleaching Powder
Poly Aluminum Chloride The Company is also engaged in
Other Agri-inputs, including Rallis
Anhydrous Aluminum Chloride producing edible and industrial
India Limited's operations, and
Toluene-based chemicals grade salt.
Chlorinated Paraffin Wax.
Others, which includes pulses,
It is involved in cotton fabrics and
spices, water purifier and nutritional
furnishing, and cotton yarn
solutions.
business.

Metric (INR Cr) TTM 31 Dec 2019 Metric (INR Cr) TTM 31 Dec 2019 Metric (INR Cr) TTM 31 Dec 2019
Revenue 11,488.7 Revenue 2,923.5 Revenue 3,472.5

EBITDA Margin 20.1% EBITDA Margin 26.5% EBITDA Margin 23.6%

PAT Margin 10.8% PAT Margin 16.7% PAT Margin 12.4%

Source – S&P Capital IQ and Company Data The Chemical Industry: Possibilities for India 26
Basic Chemicals Industry -
Segments

Dyes and Pigments – Export & Imports

Dyes and Pigments
(USD in million)
Dyes and pigments are substances that impart

2,017
color to a material.

1,839

2,213
Chemists and other scientists use the term
colorant for the entire spectrum of coloring

356
331
331
materials, including dyes and pigments.

Pigments are particles of color that are insoluble FY16 FY17 FY18
in water, oils, and resins. Used for coloring paints, Export Import
inks, cosmetics and plastics

Dyes are usually water soluble and depend on Installed Capacity and Production of
physical and/or chemical reactions to impart their Dyes and Pigments in India (‘000 MT)
color. Used for coloring textiles, paper, and other
substances

480
467
457

452
430

367
320
India is a net exporter of dyes and pigment and it 304
284

285

contributes ~ 16% to the global dyestuff and dye

intermediates production

FY14 FY15 FY16 FY17 FY18

Installed Capacity Production

Major Export of Dyes and Pigments

in FY18 (USD in million)
Other Dyes and
Pigments, 398.4 Pigment
Emulsion,
Disperse 678.4
Dyes, 87.5

Food Colour,
134.0

Azo Dyes,
279.5 Reactive
Dyes, 635.1

Source – Department of Chemicals & Petrochemicals The Chemical Industry: Possibilities for India 27
 Basic Chemicals Industry -
Segments

Dyes and Pigments : Key Players in India

Sudarshan Chemical Industries Bodal Chemicals Limited is Asahi Songwon Colors Limited is
Limited is a color and effect engaged in business of dyestuffs, engaged in business of
pigment manufacturer. Business dyes intermediates and basic manufacturing and export of
Segment: Pigments, Agro chemicals. color pigments.
chemicals and Others.
The Company produces a range of The Company manufactures
The Company supplies pigments to chemicals, which are used as raw phthalo pigments, comprising
paints, plastics, inks, cosmetics, materials for dye intermediates and Copper Phthalocyanine crude
textile and other applications. dyestuff (CPC) blue crude and a range of
beta blue pigments
Brands: The Company offers its The Company's products include
pigments under various brands, Vinyl Sulphone Ester, The Company's products include
including H Acid, Pigment Alfa Blue 15:0
Sudaperm, F C Acid, Pigment Alfa Blue 15:1
Sudafast, DASA, Pigment Alfa Blue 15:3
Sudacolor Gama Acid, Pigment Alfa Blue 15:4
Sumica 6 Nitro
Its phthalocyanine pigments are
Sudadur Acid Black 210,
used in the manufacture of printing
Sudafine Reactive Black BL/GR,
inks, paints, plastics, textiles and
Sumicos Sulphuric Acid,
paper industries.
Prestige Oleum,
Sulphur Trioxide
Chlorosulphonic Acid

Its products are used as raw

materials in textile, leather, paper
and other dye consuming
industries

Metric (INR Cr) TTM 31 Dec 2019 Metric (INR Cr) TTM 31 Dec 2019 Metric (INR Cr) TTM 31 Dec 2019
Revenue 1,570.8 Revenue 1,350.6 Revenue 279.9

EBITDA Margin 12.3% EBITDA Margin 8.7% EBITDA Margin 8.3%

PAT Margin 9.1% PAT Margin 6.8% PAT Margin 7.5%

Source – S&P Capital IQ and Company Data The Chemical Industry: Possibilities for India 28
 5
Specialty
Chemicals
Industry
Specialty Chemicals Industry -
Overview

Specialty Chemicals varies widely across the industry. These chemicals are used in low quantities and are targeted
toward specific end-use applications. Specialty Chemicals commands higher EBITDA margin than most bulk products.

The specialty chemicals constitute 22% of total chemicals and petrochemicals market in India. As of FY18, the total
market size is around USD 35 bn. India is also gaining traction as an outsourcing hub for Specialty Chemicals
manufacturing

Segments within specialty chemicals vary in attractiveness and witness varying levels of competitive intensity, margin
profiles, defensibility against raw material cost movements, and growth (including growth of the end-user segment in
many cases)

Specialty chemicals Includes paints, adhesives, water management chemicals, oilfield chemicals, flavours and
fragrances, rubber additives, paper additives, industrial cleaners and fine chemicals sealants, coatings, catalysts etc

In 2019, the Indian Specialty Chemical Indian Specialty Chemical Industry

market is valued at USD 35 billion is expected to grow at 10% till 2025

Segments Covered

Water treatment
Flavors & Fragrance Paints Adhesives / Sealants
chemicals

Source – Global Business Report The Chemical Industry: Possibilities for India 30
Specialty Chemicals Industry -
Segments

Flavors & Fragrance Ingredients

Flavors Fragrance

Food Industry in confectionery, Segmentation Personal Care in toilet soaps,

dairy products, bakery & Based on shampoos, hand wash, cosmetic,
processed food, savoury Application hair oil, deodorants etc

Pet Industry in pet food, farm Fabric Care in laundry soaps,

animal feed synthetic detergents, fabric
conditioners
Tobacco Industry in cigarette,
gutka, pan masala Tobacco industry in gutka, pan
masala
Pharmaceuticals Industry in
medicines, health food Household care in cleaners, air
supplements freshners, candles, mosquito
repellents
Pet Industry in pet food, farm
animal feed Aromatherapy product and also
in paints, plastics, stationery etc

In 2018, the Global Flavors & Fragrance (F&F) Industry is worth USD 24.10 bn and
Size and Growth The Indian Flavors & Fragrance Industry is worth USD 500 mn
The Indian industry has grown at a CAGR of 11%

Increasing acceptance of natural F&F ingredients

Key Trends
Indian market is dominated by global F&F houses, who are strengthening presence in India

Key Player In India

S H Kelkar and Company Limited is an India-based fragrance and

flavors manufacturing company.
The Company is engaged in offering fragrances in various categories,
such as personal care, hair care, skincare and cosmetics, fabric care, Metric (INR Cr) TTM 31 Dec 2019
household products and fine fragrances.
Revenue 1,106.3
The Company offers flavors in various categories, such as dairy
EBITDA Margin 11.8%
products, beverages, confectionery, bakery products and
PAT Margin 3.8%
pharmaceuticals.
Source –Public and Company Data The Chemical Industry: Possibilities for India 31
Specialty Chemicals Industry -
Segments

Water Treatment Chemicals

With a consistent rise in the demand for the safe and fresh water, the chemical industry uses innovative ways of water
treatment in order to make water acceptable for end-use such as drinking, cooking, irrigation and industrial purposes.

Common water chemicals includes: Algicide, Chlorine, Chlorine dioxide, Muriatic and Soda Ash or sodium bicarbonate.

Biocides and disinfectants includes use

of chlorine for disinfection of water
Coagulants and flocculants aids in
removal of suspended particles

pH adjusters chemicals are used to adjust the acidity or

Defoamers or antifoams prevent the alkalinity of water in industrial and municipal water treatment
formation of foam in industrial liquids
Boiler water chemicals aid to prevent
corrosion and scale formation in boiler

Industrial water market is driven by power and energy segment while municipal water is
Key Trends driven by urbanization
Organized players dominate the market for water chemicals with a 80% share

Key Player In India

Chembond Chemicals Limited is a manufacturer of a range of

specialty chemicals, such as water treatment, polymers, construction
chemicals.
The Company's segments include Specialty Chemicals and Water Metric (INR Cr) TTM 31 Dec 2019
Treatment Plant.
Revenue 281.1
It offers a range of water treatment chemicals, such as boiler water
EBITDA Margin 5.8%
treatment chemicals, membrane treatment chemicals, raw water and
PAT Margin 5.1%
effluent treatment polymers and defoamers

Source –Public and Company Data The Chemical Industry: Possibilities for India 32
Specialty Chemicals Industry -
Segments

Paints Market share of top players in FY19

The sector consists of manufacturers of paints, varnishes,

lacquers, shellacs, stains and a variety of other specialty coatings. Others,
Asian
32.3%
Paints,
The Indian Paint Industry is estimated to be USD 660 Million 38.9%
Industry. In FY19, the paints industry has expanded at the rate of
12% in volume terms and 15% in value terms. Akzo Nobel
India, 5.9%
Kansai Nerolac
Segmentation: classified under 2 segments. Decorative include Berger Paints, Paints,10.9%
exterior and interior wall paints, wood finishes, enamels while 12.2%
Industrial Segment includes automotive coatings, powder
coatings and protective coating. Source: Care Rating

Key growth factors includes urbanization, higher disposable

income, growth in infrastructure spending and recovery in real
estate and automobile segment.

Key Players In India

Asian Paints Limited is engaged in the business of
manufacturing, selling and distribution of paints, coatings,
products related to home decor, bath fittings and
providing of related services.
Company's business segments are Paints and Home
Improvement
Berger Paints India Limited is engaged in the manufacture
of paints and varnishes, enamels or lacquers.
The Company offers products in categories, including
interior wall coatings, exterior wall coatings, Berger metal
and wood paints, protective coating, undercoats and
construction chemicals.

Its products include Its products include

special effects, plain finishes and distempers for interior Silk illusions
walls; Bison distemper
textures finishes, plain finishes and WeatherCoat All Guard
design for exteriors for exterior walls; WeatherCoat Smooth
wall papers; wood finishes; metal finishes; water proofing Breathe Easy Enamel
solutions; Luxol Lustre
adhesives, and Berger Butterfly GP Enamel
painting tools and implements
Metric (INR Cr) TTM 31 Dec 2019 Metric (INR Cr) TTM 31 Dec 2019
Revenue 20,490.0 Revenue 6,483.0

EBITDA Margin 16.5% EBITDA Margin 13.9%

PAT Margin 13.6% PAT Margin 10.3%

Source – S&P Capital IQ and Company Data The Chemical Industry: Possibilities for India 33
Specialty Chemicals Industry -
Segments

Adhesives / Sealants

Adhesives is any substance applied to the surface of material that binds them together and resists separation.

Adhesives are formulated by compounding the base material with fillers, pigments, stabilizers, plasticizers and other
additives.

The application is found in packaging, construction, automobile, laminates, footwear industries.

The global adhesives and sealants market size was valued at USD 52.55 billion in 2017 and is expected to witness a
CAGR of 5.6% from 2018 to 2025.

The Indian adhesives and sealants market is consolidated with 4 top players with an approximate market share of
85.3%. The major companies includes Pidilite Limited, Henkel AG & Co, Arkema Group and H B Fuller Company.

Largely organized market MNC’s dominate B2B market due to references in large construction projects. Indian players
dominate B2C segment due to better understanding of local distribution channel

Key success factor in the segment includes branding and marketing in B2C segment and technical expertise and
good reference in B2B segment.

Key Players In India

Pidilite Industries Limited is engaged in the manufacture of

adhesives and glues, including rubber based glues and
adhesives.

Business segments includes:

The Consumer & Bazaar Products segment includes
products, such as adhesives, sealants, art and craft
material and others, construction and paint chemicals.
These products are used by carpenters, painters,
plumbers, mechanics, households, students and offices,
among others.

The Industrial Products segment covers products, such Metric (INR Cr) TTM 31 Dec 2019
as industrial adhesives, synthetic resins, organic Revenue 7,389.9
pigments, pigment preparations and surfactants, and EBITDA Margin 19.1%
caters to various industries, such as packaging, textiles,
PAT Margin 16.3%
paints, printing inks, paper and leather.

The Others segment consists of vinyl acetate monomer

(VAM) manufacturing unit of Vinyl Chemicals (India) Ltd

Source –Public and Company Data The Chemical Industry: Possibilities for India 34
 6
Agro Chemicals
Industry
6. Agro Chemicals Industry -
Overview

Global agro chemical market was valued at USD 240 bn in 2019; to grow at 3.7%
between 2020 to 2022 and reach at USD 270 bn.

India agro chemical industry is expected to grow at 8% CAGR reaching USD 3.7 bn by
Size & Growth
FY22 and USD 4.7 bn by FY25

Growth to be driven by increase in awareness level of farmers, improvement in rural

income and the pressure for improving productivity

Investments and capacity expansion have resulted in excess capacity and low utilization
Trends shaping the
market
Strategic partnership models are giving way to potential inbound M&A opportunities

Inorganic growth by outbound acquisitions has been a key trend among Indian players

India is the 3rd largest producer of agrochemicals and

Highlights
India exports 50% of its current production and these exports are likely to remain key
components of the Industry

Global
Player
Key Players

Domestic
Player

Source – IBEF The Chemical Industry: Possibilities for India 36

Agro Chemicals Industry -
Overview

Categories of Agro Chemicals

Agro Chemicals

Insecticides Fungicides Herbicides Other Pesticides

Agro Chemicals Value Chain

Research & Technical Grade Formulation Marketing &

Development Manufacturing Manufacturing Distribution

Research new Produce Agents added to Marketing and

molecules concentrated produce the retail branding
chemicals in bulk product
Huge research Strong distribution
budget involved Requires Product network required
economies of scale manufactured as
for production per the local
standards

The Chemical Industry: Possibilities for India 37

 Agro Chemicals Industry :
Key players in India
Rallis India Limited is engaged in
the business of manufacture and
marketing of Agri Inputs.
Business Segments
The Agri-Inputs segment consists
of Pesticides, Plant Growth
Nutrients (PGN) and Seeds.
The Company's Non-Pesticide
Portfolio includes Agri Services.
The Other segment consists of
Polymer.
The Company's products includes
Fungicides, including Contaf,
Contaf Plus, Master and Fujione;
Weedicides, including Fateh, Tata
Metri, Tata Panida, and
Insecticides, including Tata Mida,
Reeva, Asataf and Manik.
various products, including hybrid
maize, hybrid paddy, hybrid pearl
millet, mustard and wheat.
Metric (INR Cr) TTM 31 Dec 2019
Revenue 2,245.2
EBITDA Margin 12.1%
PAT Margin 8.3%
Source – S&P Capital IQ and Company Data
UPL Limited is engaged in the
business of agrochemicals,
industrial chemicals, chemical
intermediates and specialty
chemicals.
Business Segments
The Agro activity segment includes
agrochemical products, seeds and
other agricultural related products.
The Non-agro activity segment
includes industrial chemical and
other non-agricultural related
products. It offers fungicides,
herbicides, insecticides, plant
growth and regulators,
rodenticides, industrial and
specialty chemicals, and nutrifeeds.
The Company’s products includes
Manzate Prostick, Vondozeb, Saaf,
Cuprofix, Dost Super, Lifeline,
Surflan, Saathi, Eros Gold,
Phosphorus Trichloride, Phosphorus
Oxychloride, Tri Ethyl Phosphite, Tri
Iso Octyl Phosphite and Di Phenyl
Iso Decyl Phosphite.
Metric (INR Cr) TTM 31 Dec 2019
Revenue 33,140.0
EBITDA Margin 17.0%
PAT Margin 4.1%
The Chemical Industry: Possibilities for India
PI Industries Limited is engaged in
the manufacturing and distribution
of agro chemicals.
The Company manufactures
agrochemicals, plant nutrients and
plant protection, specialty fertilizers
and hybrid seeds.
Brands
Insecticides brands includes
Lepido, Dodger, Colt, Osheen,
Colfos, Fosmite, Jumbo, Foratox,
Carina, Maxima and Vibrant.
Fungicides brands includes
Cuprina, Lurit, Kitazin, Sanipeb,
Clutch and Logik.
Herbicides brands includes Solaro,
Nominee Gold, Inro, Bingo, Pimix,
Bunker and Melsa.
Specialty products include Biovita
Granules and Biovita Liquid.
Also the Company provides
services including contract
research, process development,
analytical method development,
process safety data generation and
process detailed engineering
Metric (INR Cr) TTM 31 Dec 2019
Revenue 3,316.1
EBITDA Margin 20.7%
PAT Margin 14.2%
38
 7
Transacted
Deal Multiples
Transacted Deal Multiples

Major PE / VC Deals in India

Deal Size Stake EV/ EV/

Target Target Segment PE/VC Fund Date (USD Mn) (%) Sales EBITDA
UPL Corp Agro Chemicals ADIA, TPG Capital Jul-18 1200 22.0% 1.84 8.77
Privi Organics Aroma Chemicals Fairfax Holdings Jul-16 55 50.85% 1.38 9.8
Safex Chemicals Pesticides & fertilizers BanyanTree Growth Capital Mar-16 9 23.08% 1.12 8.74
GSP Crop Science Agro Chemicals Oman India Joint Investment Fund Dec-14 15.8 11.72% 1.26 8.00
Standard Greases Lubricant Chemicals Tata Capital Growth Fund Nov-14 10 9.5% 0.93 10.71
Crystal Crop Protection Agro Chemicals Everstone Nov-11 28.47 9.09% 2.43 11.09
Vinati Organics Specialty Chemicals IFC Aug-11 5 4.36% 1.74 7.51
Visen Industries Emulsions, Adhesives, Carlyle
Jun-11 25 36.4% 0.62 6.44
construction chemicals
Insecticides India Insecticides Goldman Sachs Apr-10 1.48 2.8% 0.64 6.98

Major M&A Deals in India

Deal Size Stake EV/ EV/

Target Target Segment Investor Date (USD Mn) (%) Sales EBITDA
Owens-Illinois Soda Ash Tata Chemicals Dec-19 195 25.0% 1.68 7.75
Phiroze Sethna Adhesives & Sealants Chembond Chemicals Nov-17 6.35 100.0% 1.58 10.11
Saboo Coatings Paints & Coatings Berger Paints Limited May-17 12.66 100.0% 1.33 9.34
Filtra Catalysts Chemicals Dorf Ketal Chemicals Jan-16 6.78 100.0% 1.08 5.95
Hi-build Coatings Paints & Coatings Indigo Paints Jan-16 13.18 100.0% 1.04 11.98
Venus Ethoxyethers Specialty Chemicals Harcros Chemicals Jan-16 1.84 51.0% 0.38 7.34
ADI Finchem Aroma Chemicals Fairfax India Holdings Corporation Nov-15 20.00 44.66% 2.08 12.49
Monarch Catalyst Chemicals Evonik Industries Mar-15 33.71 100.0% 1.04 7.58
Resinova Chemie Adhesives & Sealants Astral Poly Nov-14 34.62 76.0% 1.67 22.65
Jasmine Concrete Exports Aroma Chemicals Firmenich Jul-14 4.5 40.0% 1.73 5.58
Sabero organics Chemicals Coromandel International Jun-11 89 73.23% 1.31 13.25
New Chemi Industries Agro Chemicals Sumitomo Chemical Dec-10 16.61 100.0% 0.90 12.04
Micro inks Chemicals – inks Huber Group Mar-10 60 17.5% 1.25 8.07

Source – Venture Intelligence The Chemical Industry: Possibilities for India 40

Transacted Deal Multiples

Transaction Multiples – based on last 4 years PE/VC and M&A deals in India

Deal Size
Target Investor Date Stake (%) EV/ Sales EV/ EBITDA
(USD Mn)
Owens-Illinois Tata Chemicals Dec-19 195.0 25.0% 1.68 7.75
UPL Corp ADIA, TPG Capital Jul-18 1,200.0 22.0% 1.84 8.77
Phiroze Sethna Chembond Chemicals Nov-17 6.4 100.0% 1.58 10.11
Saboo Coatings Berger Paints Limited May-17 12.7 100.0% 1.33 9.34
Privi Organics Fairfax Holdings Jul-16 55.0 50.9% 1.38 9.8
Safex Chemicals BanyanTree Growth Capital Mar-16 9.0 23.1% 1.12 8.74
Filtra Catalysts Dorf Ketal Chemicals Jan-16 6.8 100.0% 1.08 5.95
Hi-build Coatings Indigo Paints Jan-16 13.2 100.0% 1.04 11.98
Venus Ethoxyethers Harcros Chemicals Jan-16 1.8 51.0% 0.38 7.34
Mean 1.27 8.86
Median 1.33 8.77

Source – Venture Intelligence The Chemical Industry: Possibilities for India 41

 8
Market Data
Trend Analysis
Market Data Trend Analysis
for Indian Chemical Companies

Petrochemical

EV/Revenue

3.2

3.1
3.1

2.6

2.5
2.4
2.3

2.1
2.1

1.7
1.7

1.7

1.6
1.6

1.5
1.4
1.4

1.2
1.2

1.0
1.0
1.1
0.8

0.7
0.6

0.6

0.6
0.6

0.5
0.5

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Reliance GAIL Polyplex Supreme Industries NOCIL

EV/EBITDA
19.7
18.7

18.6
18.4
15.6
14.5

13.7

11.9
11.6

11.4
11.3

11.1
11.1
9.8

9.8
9.7

9.7
8.3

7.9

7.3
7.0

7.2
6.5

6.3

4.7
4.5
4.2

3.7
3.6

3.2

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Reliance GAIL Polyplex Supreme Industries NOCIL

Source – Capital IQ The Chemical Industry: Possibilities for India 43

Market Data Trend Analysis
for Indian Chemical Companies

Chlor - Alkali Chemicals

2.3
EV/Revenue

2.2
2.2

1.7
1.5
1.4

1.3

1.2
1.1
1.0

1.0

1.0

0.9
0.9

0.9

0.6
0.6
0.5

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Tata Chemicals Gujarat Alkalies GHCL

EV/EBITDA
11.4

10.1

8.8
7.7

7.1

6.9

6.8
6.5
5.7

4.9

4.2
3.8

3.8
3.7
3.7

3.4
3.4

2.6

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Tata Chemicals Gujarat Alkalies GHCL

Source – Capital IQ The Chemical Industry: Possibilities for India 44

Market Data Trend Analysis
for Indian Chemical Companies

Dyes and Pigment

EV/Revenue

2.6
2.2

2.0
1.9
1.6
1.5

1.4
1.4
1.2

1.2
1.2
1.1
0.8

0.8
0.8
0.7

0.7
0.7
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Sudarshan Chemical Bodal Chemicals Clariant Chemicals

EV/EBITDA
38.8

22.8
21.0

21.3

18.3
15.1

13.3

12.5

12.2

8.8
8.3

8.2
7.6

7.2
6.4
6.5

6.3
4.1

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Sudarshan Chemical Bodal Chemicals Clariant Chemicals

Source – Capital IQ The Chemical Industry: Possibilities for India 45

Market Data Trend Analysis
for Indian Chemical Companies

Agrochemicals

EV/Revenue

6.1
5.3
5.1

4.9
4.3

3.7

3.0

2.5

2.5

2.5
2.5

2.4
2.3

1.8
1.8

1.7
1.7

1.6
1.5
1.3
1.2

1.2
0.8

0.8
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Rallis Insecticides UPL PI Industries

EV/EBITDA
29.6
24.7

24.4
22.1

21.0
18.8
18.2

17.1
16.0

15.0

14.3
13.5
13.0

12.5
12.0
11.6
10.8

11.0

10.6
9.3

9.1
9.1

7.7

5.9

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Rallis Insecticides UPL PI Industries

Source – Capital IQ The Chemical Industry: Possibilities for India 46

Market Data Trend Analysis
for Indian Chemical Companies

Specialty Chemicals - Paints

EV/Revenue

8.5
8.0
7.4
6.8

6.4
5.8

5.7
5.4

5.2
5.1

4.9
4.8

4.4
4.0
4.1

3.9
3.4
3.3

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Asian Paints Berger Paints Nerolac

EV/EBITDA
49.6
45.5
40.7
35.3
34.4

34.2

33.6

33.6
32.8

32.1
31.2
30.1
28.8

26.4
26.5
26.0

25.8

25.6

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

Asian Paints Berger Paints Nerolac

Source – Capital IQ The Chemical Industry: Possibilities for India 47

Market Data Trend Analysis
for Indian Chemical Companies

Specialty Chemicals - Adhesives

Pidilite Industries Limited

50.6
45.2
39.7

33.7
27.5
25.5

10.5
8.8
7.4
6.3

6.2
5.6

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 LTM DEC 19

EV/Revenue EV/EBITDA

Source – Capital IQ The Chemical Industry: Possibilities for India 48

 9
Opportunities in
Indian Chemical
Industry
Opportunities in the
Indian Chemical Industry

Opportunities in India Chemical Sector

Access to Strategic Alternative

Natural Resources Feedstock

Mega Merger Growing Per Move towards

Consolidation Capita greener solutions
Consumption

Emerging B2B Emergence of

Customers’ Technology
Preferences Platforms

Sector-wise Impact

Key Trends Bulk Chemicals Petro Chemicals Specialty Chemicals Fertilizers

Growing Per Capita Consumption
Alternative Feedstock
Move towards greener solutions
Emergence of Technology Platforms
Emerging B2B Customers’ Preferences
Mega Merger Consolidation
Access to Strategic Natural Resources

Source: FICCI The Chemical Industry: Possibilities for India 50

10
Trends Shaping
Indian Chemical
Industry and the
Way Forward
Trends shaping in the Indian
Chemical Industry and the
Way Forward

Trends

Downstream Trade Conflict Environment norms

Globally several oil and
gas majors are venturing
downstream into
petrochemicals which
could open up near term
opportunities for Indian
Chemicals Industry
Trade conflict among USA, Stricter environmental
Europe & China have led in norms in China will
shift in global supply chain. create an opportunities
for Indian Chemical
This scenario could Companies in certain
present opportunity for segment
India

Digital technologies
Consolidation through
opportunities could be
merger could help to
tapped by Indian
fortify competitive
companies to expand
advantage
margins

In the recent times, COVID-19 has exacerbated the ongoing declining situation and has become a threat to global
economic growth. However most analysts see Indian Chemical Industry manufacturers to benefit from the current
situation and remain in focus, provided these players handle the opportunities well.

Going forward, more support in terms of fiscal incentives like tax breaks and special incentives through petroleum,
chemicals and petrochemicals investment regions or special economic zones to encourage setting up of downstream
units, will certainly enhance production capacity and help overall development of the industry. In order to bring about
structural changes in the working of the domestic chemicals industry, future investments should focus more on
crude-to-chemicals complexes or refineries set up to cater to the production of chemicals, and not transportation
fuels such as petrol and diesel only.

The Chemical Industry: Possibilities for India 52

Services
Investment Banking
Valuation (Category 1 Merchant Bank)

• Business & Equity Valuation • M&A Advisory:

• Valuation of Brands, Goodwill, Other Intangible Assets &
Intellectual Property
• Valuation of Financial Securities, Instruments & Derivatives
• Valuation of Industrial Assets and Plant & Machinery
• Valuation of Real Estate
• Valuation of Infrastructure Assets & Specialized Assets
• Purchase Price Allocations (PPA) for Mergers & Acquisition (M&A)
• Impairment Studies for Tangible Assets
• Impairment Studies for Cash Generating Units, Intangible
Assets & Goodwill
• Mines, Mineral Advisory and Valuation
• Valuation of ESOPs and Sweat Equity
• Valuation for Tax, Transfer Pricing and Company Law Matters
• Fairness Opinions
• Valuation under Insolvency & Bankruptcy Code (IBC)
• Determination of Swap Ratio under Mergers and Demergers
• Valuation of Inventory / Stocks and Debtors / Receivables
• Litigation and Dispute Valuation Services
• Sell Side & Buy Side
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(Corporate & Project Finance)
• Distressed Investment Banking – One-Time Settlement, Priority
and Interim Funding, Rescue Financing, and Buyouts
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Transaction Services
• Buy side due diligence and closing due diligence
• Vendor due diligence and vendor assistance
• Setting up and managing dataroom
• Advice on sale and purchase agreements (SPA) and business
transfer agreements (BTA)
• Assistance in deal negotiation

Risk Consulting Transaction Tax

Strategic & Risk Advisory Services Deal Tax Advisory (Strategic, IBC, PE/VC)
• Techno Economic Feasibility Studies • Tax Due-Diligence
• Economic Viability & Financial Appraisal • Tax Structuring
• Business Plan Review • Deal Negotiation Review
Technical Support Services • Transaction Documentation Review
• Lender’s & Investor’s /Independent Engineer Services • Post-Deal Integration
• Technical Due Diligence, Technical Opinions Corporate Restructuring
• Chartered Engineers Opinion & Certification • Group Restructuring
• Project Cost Investigation • Financial/Capital Restructuring
• Project Appraisal and Monitoring Succession Planning
Agency for Specialized Monitoring (ASM) Holistic Implementation Support
• Term Loan Monitoring • Merger/Amalgamation
• Working Capital Monitoring • Demerger/Spin-off
• Cash Flow Monitoring • Capital Reduction
Financial & Treasury Risk Advisory • Share Buyback
• Assessment of Credit Risk, Market Risk & Interest Rate Risk • Business Transfers
• Asset Quality Review & Stress Testing • Liquidation/Wind-up
• Assessment of Expected Credit Loss
• Assessment of Asset Liability Management & Liquidity Risk Restructuring
Dispute & Litigation Support • Insolvency Professional Services
• Assistance in the preparation of Resolution Plan
• Valuation Services • Independent Bid Evaluation of Restructuring Proposals
• Damages & Loss of Profit Analysis • Process Advisor
• Independent Expert testimony • Advisor to Committee of Creditors / Creditor Advisory
• Anti-trust & Competition Advisory • CRO services - Chief Restructuring Officer
• Post-Acquisition Disputes, Joint Venture & Shareholder Disputes • Priority and Interim Funding
• Civil & Construction Disputes, Real Estate Disputes • Turnaround Advisory and Business Transformation
• Intellectual Property Rights Dispute • Interim Management Services

The Chemical Industry: Possibilities for India 53

Contact Us

Management
Rajeev R. Shah Manish Kaneria Mitali Shah Ravishu Shah
Managing Director & CEO Managing Director & COO Managing Director Managing Director
+91 79 4050 6070 +91 79 4050 6090 +91 79 4050 6050 Financial Advisory Services

rajeev@rbsa.in manish@rbsa.in mitali@rbsa.in +91 22 6130 6093

ravishu.shah@rbsa.in

Ravi Mehta Chetan Khandhadia Ajay Malik

Managing Director & Head Managing Director & Head Managing Director & Head
Transaction Tax Transaction Services Investment Banking
+91 22 6130 6052 +91 22 6130 6095 +91 22 6130 6015
ravi.mehta@rbsa.in chetan.khandhadia@rbsa.in ajay.malik@rbsa.in

Project Team
Sumit Kumar Vikas Biyani Jaison Dsouza
+91 80 4112 8593 +91 40 4854 6254 +91 80 4112 8593
sumit.kumar@rbsa.in vikas.biyani@rbsa.in jaison.dsouza@rbsa.in

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Prahladnagar, Near Sigma Mall,
Ahmedabad - 380 015 Bangalore - 560 052
Tel: +91 79 4050 6000 M: +91 97435 50600
Tel: +91 80 4112 8593
202, 2nd Floor, Shangrila Plaza, 105 Cecil Street,
Road No. 2, Opposite KBR Park, # 22-00 The Octagon,
Banjara Hills, Singapore - 069 534
Hyderabad - 500 034 M: +65 8589 4891
M: +91 90526 60300 Email: singapore@rbsa.in
Tel: +91 40 4854 6254

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