Chemical industry

Chem-SpltySlide 2M/Sm

Chem-Pente /Forma
chem-SpltyLarge

Chem-OrgMed/Sml

Chem-OrgLarge

ChemPlasticizer

Not rated

Approached credit rating agencies

Chem-SpltyM/Sm
. Aarti Industries Ltd Alkyl Amines Chemicals Ltd Excel Industries Ltd Godrej Industries Ltd Gwalior Chemical Industries Ltd Hikal Ltd Navin Fluorine International Limited

chem-SpltyLarge

Chem-OrgMed/Sml

Chem-OrgLarge
Akzo Nobel Chemicals Ltd Avon Organics Ltd Gulshan Polyols Ltd

Chem-Pente /Forma
Ciba India Ltd

Citurgia Biochemicals Ltd

Andhra Petrochemica ls Ltd Ganesh Benzoplast Ltd

Clariant Chemicals (India) Ltd Jayant Agro Organics Ltd NOCIL Ltd

Dujodwala Products Ltd

Elantas Beck India Ltd J F Laboratories Ltd Resonance Specialities Ltd

ChemPlasticizer

Pidilite Industries Ltd

Punjab Chemicals & Crop Protection Ltd

Instrument issued by chemical sector

Debt Programme

Short Term Debt

NonConvertible Debentures

Fixed Deposit

Long Term Debt Term Deposit

Foreign currency debt

Debentures

Commercial Paper

Partly Convertible Debentures

Certificate Of Deposits

listed companies in chemical industry

listed companies
40 35 30 25 20 15 10 5 0
no of companies listed

37 23 4 Listed on BSE Listed on NSE Unlisted

Listed on BSE

The below given information is related to 5 chemical industry sectors they are: Chem-Org-Large, Chem-Org-Med/Sml, Chem-Plasticizer, Chem-Pente/Forma, Chem-Splty-Large, Chem-Splty-M/Sml

companies gone for credit rating

26% 74%

companies not gone for credit rating companies approchedCredit Rating

23 companies have gone for credit rating out of 58 companies in the following sectors. ChemOrg-Large, Chem-Org-Med/Sml, Chem-Plasticizer, Chem-Pente/Forma, Chem-Splty-Large, Chem-Splty-M/Sml

TOTAL PERCENTAGE OF COMPANIES APPROCHED TO CREDIT RATING

18% 0% CRISIL CARE ICRA 14% 18% 50% FITCH india CRISIL & CARE

The above chart depicts that most of the companies have gone to CRISIL for rating that is 50% , followed by CARE, ICRA, non of the companies are rated with FITCH India. 18% are rated on care as well as CRISIL.

instruments issued from 1996 to 2009 60 50 50

no of instruments

47

50

40 30 20 10 0
fixed deposit 18 comercial paper 50 short term debt 47 long term debt 50 debt program 10 debentures 4

18 10 4 3
pass through certificate 3

19 5
partly convertible debe 5

2
forign currency 2 term loan programe 19

instruments

Chem-Org-Large, Chem-Org-Med/Sml, Chem-Plasticizer, ChemPente/Forma, Chem-Splty-Large, Chem-Splty-M/Sml

instruments issued by chemical industry year wise (in total) year 1996-2009
180 160
171

no of instruments issued

140 120 100 80 60 40

22 50 47 54 27 34 20 12 11

130

19

20
2

10

0 no of instruments issued

1996 2

1997 10

1998 50

1999 47

2000 22

2001 54

2002 27

2003 20

2004 12

2005 34

2006 11

2007 19

years

amount raised by each instrument (year 1996-2009)

5000
amount in crores

4000 3000 2000 1000 0

fixed deposit instruments 0 comercial paper 1506.00 short term debt 4464.7 long term debt 482.62 debt program 1318 debentures 0 pass through certificate 114.93 partly convertible debe non convertible deb 749.69

forign currency 0

term loan programe 1281.76

years

Instruments highly rated in cARE (year 1997 to 2009

Care highly rated instruments
long term debt & short term debt 3.5 3 2.5 2 1.5 1 0.5 0

19 97 long term debt 0 Short term debt 0

19 98 0 0

19 99 0 0

20 00 0 0

20 01 0 0

20 02 0 0

20 03 0 0 years

20 04 0 0

20 05 0 0

20 06 0 0

20 07 0 0

20 08 0 3

20 09 1 3

Instruments highly rated in crisil year 1997-2009

30 25 20

instruments

15

10

0 Non convertible debenture Short term debt commercial paper fixed deposit Term Loan Programme

1997 0 0
3 0

1998 11 3 20
5 0

1999 7 1 4
2 0

2000 1 0 2
2 0

2001 13 2 4
2 0

2002 18 1 3
1 0

2003 26 1 2
1 0

2004 19 4 0
0 0

2005 7 5 1
0 0

2006 8 2 1
0 0

2007 7 8 0
0 0

2008 8 7 0
0 16

2009 7 16 0
0 2

years

Instruments least rated in crisil Year 1997-2009

Crisil least rated instruments year 1997-2009
10 9 8 7 no of instruments 6

5
4 3 2 1 0 1997 0 0 0 0 1998 0 0 4 0 1999 4 0 0 0 2000 0 0 0 0 2001 0 0 0 0 2002 0 0 0 0 2003 0 0 0 0 2004 0 0 0 0 2005 0 0 0 0 2006 0 0 0 0 2007 0 0 0 0 2008 0 0 0 1 2009 0 2 0 0

Debentures Debt Programme

Partly Convertible Debentures pass thhrough cert

Instrument highly rated in icra year 1997-2009

Chart Title
10 9 8 7 no of instruments 6 5 4

3
2 1 0

199 199 199 200 200 200 200 200 200 200 200 200 400 7 8 9 0 1 3 4 5 6 7 8 9 commercial paper 0 1 0 3 0 1 0 1 1 1 1 2 0 short term debt 0 1 0 3 2 0 1 1 0 0 0 2 0 years

Instrument least rated in icra Year 1997-2009

8 7 6

nio of instruments

0
Long Term Debts Debt Programme

1997 1 0

1998 1 0

1999 2 0

2000 3 0

2001 2 0

2002 0 0

2003 0 0

2004 0 0

2005 0 0

2006 0 0

2007 0 0

2008 0 2

2009 0 7

Instrument least rated in icra Year 1997-2009

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
no of instruments

19 19 19 20 20 20 20 20 20 20 20 20 20 97 98 99 00 01 02 03 04 05 06 07 08 09 0 0 0 0 0 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0

Non-Convertible Debentures Partly Convertible Debentures

total amount raised by chemical industry in Rs.crores

9000

8398.99

8000

7000

amount in crores

6000

5000

4000

3000

2000

1080
1000

24.1
0 Series1 Chem-Org-Large 8398.99 24.1

0
0

197
197 1080

217.61
217.61

Chem-Org-Med/smal Chemicals - Pentaerythritol / Formaldehyde Chemicals - Plasticizers Chemicals - Speciality - Chemicals - Speciality - Medium / Small Large

Grading for instruments in Chemical Industry

grading of instruments

100 100 80 60 40
uppgraded downgraded stable

20
0

10

NUMBER OF INSRUMENTS RAISED BY CHEMICAL SECTOR year 1997-2009

CHEM ORG LARGE
35 30 25 20 15 10 5 0

no of instruments

NonPass Convertibl Debt Term Loan Foreign Partly Fixed Commerci Short Long Term Debentur Through Progamm Programm Currency convertibl e Deposits al Paper Term Debt Debts e Certificate Debentur e e Long Term e s es 0 21 0 0 0 12 0 0 0 19 11 0 3 29 10 0 4 5 3 0 2 2 6 0 0 15 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0

CARE CRISIL ICRA FITCH INDIA

years

NUMBER OF INSRUMENTS RAISED BY CHEMICAL SECTOR year 1997-2009

CHEMICAL SPEC MED /SMALL
2.5 NO OF INSTRUMENTS 2 1.5 1 0.5 0
NonConvertibl Fixed Commerci e Deposits al Paper Debentur es 1 0 Term Foreign Pass Debt Partly Loan Currency - Debentur Through Progamm convertibl e Program Long Certificate e e me Term s 1 0 0 1 0 0 0

Short Term Debt 1

Long Term Debts 2

CARE CRISIL ICRA FITCH INDIA

1
0 0

0
0 0

1
0 0

2
0 0

1
0 0

0
0 0

0
0 0

1
0 0

0
0 0

0
0 0

0
0 0

NUMBER OF INSRUMENTS RAISED BY CHEMICAL SECTOR year 1997-2009

10 9 8 7 6 5 4 3 2 1 0

no of instruments

NonPass Convertibl Term Loan Foreign Partly Through Fixed Commerci Short Long Term Debt Programm Currency - Debenture convertibl e Deposits al Paper Term Debt Debts Progamme Certificate Debenture e Long Term e s s 0 5 1 0 0 0 5 0 0 0 0 0 0 9 0 0 0 0 0 0 0 0 0 1 0 0 0 1 0 2 0

CARE CRISIL ICRA FITCH INDIA

instruments 0 0

CARE CRISIL

NUMBER OF INSRUMENTS RAISED BY CHEMICAL SECTOR year 1997-2009

CHEMI SPECIALITY LARGE
16
NO OF INSTRUMENTS

14 12 10

FITCH INDIA CRISIL

ICRA CARE

8
6 4 2
Non-Convertible Debentures
Commercial Paper Long Term Debts Term Loan Programme

Debenture

INSTRUMENTS

Partly convertible

NUMBER OF INSRUMENTS RAISED BY CHEMICAL SECTOR year 1997-2009

3.5 NO OF INSTRUMENTS 3 2.5 2 1.5 1 0.5 0

CHEM PLASTICIZERS
FITCH INDIA ICRA CRISIL CARE

NonConverti Commer Fixed cial ble Deposits Debentu Paper res FITCH INDIA 0 0 ICRA 0 0 CRISIL 3 3 CARE 0 0

Short Term Debt 0 0 1 0

Long Term Debts 0 0 0 0

Term Foreign Pass Debt Partly Loan Currenc Debentu Through Progam converti re Program y - Long Certificat me ble me Term es 0 0 INSTRUMENTS 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 0

Total number of instruments issued and total amount raised in chemical industry year 1997-2009
350000 300000 250000 200000 150000 100000 50000 0 Amount (Rs. No. of instruments

amoumt in RS crores

Amount (Rs.

No. of instrument

1997 50 24

1998 12687 93

1999 13690 79

2000

2001

2002

2003

2004

2005

2006

2007

2008

3725 20220.5 20077.4 15172.8 14237 17659.4 28792.7 33255 307217 60 115 50 36 years 29 52 31 46 100

Instruments upgraded downgraded and stable

rating for commercial paper year 1997-2009

no of instruments graded

commercial paper stable downgrade

20 15 10 5 0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 17 17 6 5 1 years 8 8 6 6 4 4 2 2 1 1 2 2 2 2 1 1 5 4 1 0 0

commercial paper 1 stable downgrade 0 1

rating for fixed deposit year 1997-2009

no of instruments graded

fixed deposit stable downgrade

6 4 2 0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4 4 1 2 2 2 2 3 3 2 years 1 1 1 1 0 0 0 0 1 1 1 1 0 0 0 0

fixed deposit 2 stable downgrade 2 0

no of instruments graded

rating for short term debt from 1997-2009

30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 short term debt 0 stable dow ngrade uppgrde years 0 1 1 0 0 2 2 3 3 2 2 2 2 1 1 5 5 1 1 3 3 14 14 20 20

short term debt stable dow ngrade uppgrde

no of instruments rated

non convertible debent stable downgrade

rating for non convertable debentures from 1997-2009

10

1997 1998 1999 0 0 0 6 5 1 1 1 1

2000 2001 2002 2003 2004 2005 0 0 0 6 6 0 2 2 0 years 1 0 0 4 4 0 2 2 0

2006 2007 2008 2 2 1 3 3 0 9 9 1

non convertible debent stable dow ngrade

rating for long term debts year 1997-2009

long term debt stable

no of instruments graded

10 5 0 long term debt stable

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0 0 0 0 0 0 0 0 0 0 0 0 0 0 year 0 0 0 0 0 0 0 0 2 2 7 7

REASONS

upgrade downgrade

stable

Reasons for Stable Instruments by CRISIL

abrasive capital structure, and its highly working capital-intensive operations that have result in a moderate liquidity position for the company

strong market position and operating efficiency

Reasons for downgrading Instruments by CRISIL

The companys very weak capital structure

cash accruals to be under pressure because of weaker demand from end-user industries

Reasons for stable Instruments by ICRA

established market position and diversified revenue profile

aggressive capital structure, and its highly working capital-intensive operations that have resulted in a moderate liquidity position for the company.

Reasons for Downgrading Instruments by ICRA

financial risk profile following larger than expected debt funded capital expenditure (capex) , and lower profitability
the companys capital structure deteriorates, and slowdown in cash accruals, thereby weakening its debt protection measures. cash accruals to be under pressure because of weaker demand from end-user industries

Reasons for Downgrading Instruments by CARE

Low proportion of long term contracts. Competition from other players.

High level of Financial Risk

Reasons for stable Instruments by CARE

o f t h e p a y m e n t s t r u c t u r e

t r e n g t h

the strength of the payment structure and credit quality

the experience of promoters n

d c r e d i t q