1. MAY
2023
Valuation | Investment Banking
Restructuring | Transaction Services
Transaction Tax | Risk Consulting
Specialty Chemicals
An Opportunity for Make in India

2. Specialty Chemicals - An opportunity for Make in India 02
The Indian Chemical Industry is one of the fastest-growing industry in the world and contributed to ~6.6%
of national gross domestic product. Currently, it ranks 3rd in Asia and 6th in the world with respect to
output, after the US, China, Germany, Japan and South Korea and is expected to reach USD 286 billion by
2025, up from USD 187 billion in 2020 with a CAGR of ~9%. Specialty Chemicals segment constitutes about
18% of the total chemical industry in India.
The specialty chemicals industry in India has witnessed a constant growth over the past few years, driven
by a strong traction in the end-user markets, and emergence of India as the preferred manufacturing
destination for companies across the globe. It has been one of the best performing segments in the Indian
manufacturing sector.
From a trading perspective, specialty chemicals account for a significant share of more than 50 percent of
the chemicals exports. Within the specialty chemicals segment, manufacturing of fine chemicals (pesticide
ingredients as well API), flavour & fragrance ingredients, surfactants and dyes and pigments are expected
to be most attractive segments in the next half decade.This is due to their strong growth potential, highly
differentiated products folio and high penetration levels.
The emerging trends in the global chemical industry is considered to positively impact the Indian chemical
industry. Chemicals manufacturing is beginning to shift away from China as well as developed nations of
the West to newer, attractive destinations like India.This is mainly on account of stringent environmental
norms enforced on manufacturing companies in China, reducing cost competency due to high tariff rates
imposed on their trade resulting from US-China trade wars, increasing cost of labour etc, supply chain
disruptions caused due to COVID-19-induced lockdown resulting in rethinking of supply chains and a move
towards deglobalization. Global Chemical majors are now looking for alternatives to China for optimizing
their supply chain and also exploring opportunities to shift closer to the demand centers.
China presently accounts for a major share of the world’s exportable specialty chemicals, whereas India
accounts for merely 1-2% indicating that the country has a huge potential to capitalize on the huge
opportunity. By capturing a significant portion of the global market away from China, the Indian chemical
industry has the potential to double in size by encouraging investment through incentives, coupled with
ease of doing business.
EXECUTIVE SUMMARY

3. Specialty Chemicals - An opportunity for Make in India
Growth in domestic demand resulting from rise in demand in different end-user industries coupled with
opportunities in the export market due to the global trends show a great opportunity for India to establish
itself as a global chemical / specialty chemical manufacturing powerhouse.
The Government of India have played a pro-active role to ensure that India is able to leverage this strong
growth opportunity. Factors like competitive advantage due to the reduction in corporate taxes, PLI scheme
for various downstream industries, 100% FDI in the chemical sector through automatic route, the PCPIR
policy, other schemes promoting Make in India and significant improvement in Ease of Doing Business
indicate a bright future for the Indian chemical industry in the coming years.
Additionally, India’s strong process engineering capabilities, low-cost manufacturing capabilities and
abundant skilled manpower are leading to an array of opportunities for imports and exports of specialty
chemicals. Likewise, increased spending on research along with large investments in capital expenditure
are aiding the growth of newer and more efficient processes and products which augur well for the growth
of the specialty chemicals industry in India.The financial performance of sample companies in this sector
over the past 5 years have shown CAGR revenue growth of ~ 20% and a huge jump in the market
capitalization implying the confidence of the capital markets in the growth story of the specialty chemicals
industry.
While India aims to emerge as a manufacturing hub for the world, there are likely to be a few challenges in
the near term. Therefore, the country should also focus on aspects such as research and development,
capital investment, acquisitions, economies of scale, and most importantly, expanding domestic demand
to sustain the rising growth of the industry.
Rajeev R. Shah
Managing Director & CEO
03
EXECUTIVE SUMMARY

4. 04
Industry Valuation Multiples Series - 6th
Edition
Global Chemical Industry 05
CONTENTS
TABLE of
01
The Indian Chemical Industry 14
02
Indian Specialty Chemical Industry 18
03
Annexures 31
04
Specialty Chemicals - An opportunity for Make in India 04

5. 01
CHAPTER
GLOBAL
CHEMICAL
INDUSTRY

6. Note1: Others mainly include Biotech chemicals. It should be noted that the Indian chemical industry generally showcases Agrochemicals &
Fertilizers and Pharmaceuticals API outside of Specialty chemicals and Petrochemicals outside of Commodity Chemicals. In the above graph the
Specialty Chemicals section, however, is inclusive of the 2 categories (Agrochemical and Fertilizers and Pharmaceuticals API) and the Commodity
Chemicals section is inclusive of Bulk chemicals and Petrochemicals
Chemical Industry - An overview
Specialty Chemicals - An opportunity for Make in India
Source: Frost and Sullivan report on Indian Chemical and Speciality
Chemical Market
Commodity Chemical
06
The Chemical industry is critical to a wide range of
end-use applications and is central to the world
economy given its role of converting raw materials
(such as oil, natural gas, metals, minerals etc.) into
products which are extensively used in all facets of
daily life.The chemical industry, thus, plays a vital
role in the economic development of any country
and the quality of life enjoyed by its people.
Chemical industry, being one of the most regulated
industries in the world, has strict regulations aimed
at minimizing release of chemical substances
during manufacturing and processing.
The global chemicals market was at around USD
5,027 Bn in 2020.This market is expected to grow at
6.2% CAGR to ~USD 6,780 Bn by 2025. The Asia
Pacific market is expected to grow at a faster rate of
~7%-8% from 2020 to 2025 while the markets in
Western Europe, North America, and Japan are
relatively mature and hence anticipated to record
slower growth of ~3-4%.
China is the largest chemical producer and has the
largest market share (39%) in the global chemical
industry followed by EU (15%) and United States
(13%). India accounts for ~4% market share in
global chemicals market.
Chemical Industry – Classification
Chemicals can be broadly classified into
Commodity Chemicals and Specialty Chemicals.
Commodity chemicals make up ~80% of the global
chemical industry, with the balance 20% being
constituted by specialty chemicals.
Global Chemical Industry - Size (USD Bn) (2020)1
GLOBAL
CHEMICALINDUSTRY
3187
3745
4780
696
847
1090
337
435
910
2015 2020 2025F
4220
5027
6780
CAGR: 3.6%
CAGR: 6.2%
Specialty Chemicals Others

7. CATEGORY CHARACTERISTICS
Organic Compounds Compounds that contain C-H bond like acetic acid, acetone, acrylate esters,
adipic acid, acrylonitrate, etc.
Inorganic Compounds Compounds that do not contain C-H bond like ammonia, hydrogen sulfide,
calcium etc.
Others Plastics resins, synthetic rubbers, fibers, films, explosives and other
petrochemicals like such as ethylene, propylene, butylenes, benzene,
toluene, xylenes i.e. the six primary petrochemicals
A. Commodity Chemicals:
Specialty Chemicals - An opportunity for Make in India 07
Commodity Chemical are common chemicals that
are produced in bulk quantities.The quality of these
chemicals produced vary little, with limited product
differentiation and are in a very standardized form
with exact compositional matches. The market for
these products is highly fragmented.The sector had
a size of around USD 3,745 Bn in 2020 and is
expected to grow at 5%-6% globally in the next five
years.
The Dow Chemical and BASF SE are the leading
companies into commodity chemicals and yet
account for less than 5% of the total market each
while more than 85% of the market share is
accounted for by numerous other smaller
companies.
Asia Pacific is the largest market for commodity
chemicals accounting for almost half of the total
market and is followed by North America and
Europe. Availability of crude oil and natural gas
from gulf countries such as Saudi Arabia, Iran, Iraq
and Syria is helping the commodity chemical
industries in Asia Pacific.
The growing economies and support for
manufacturing in developing countries such as
China, India and Indonesia have led to high growth
prospects for commodity chemicals in the Asia
Pacific region.
Broad categories of Commodity chemicals:
Source: Frost and Sullivan report on Indian Specialty Chemicals
Industry - 2022
Global Commodity Chemical Industry
– Size (USD Bn) (2020)
3187
3745
4780
2015 2020 2025
CAGR 3.3%
CAGR 5.0%
GLOBAL
CHEMICALINDUSTRY

8. B. Specialty Chemicals:
Specialty Chemicals - An opportunity for Make in India 08
Specialty chemicals are derivatives of basic
chemicals that are manufactured for specific
end-use solutions. These chemicals are geared
toward specific services and customer needs,
rather than general use. These are typically
manufactured in lower volumes but enjoy higher
realizations due to the complexities involved in the
manufacturing process. These products are
primarily used as additives or provide specific
attributes to end products. There is extensive
research & development (R&D) and product
innovation involved in developing specialty
chemicals to make it the differentiator over
commodity chemicals.
The market for specialty chemicals is highly
fragmented and the global market was valued at
USD 847 Bn in 2020 with a CAGR of at 4% over 2015
to 2020 and is estimated to grow to ~USD 1,090 Bn
by 2025, led by the growth in Asian markets.
Source: Frost and Sullivan report on Indian Specialty Chemicals
Industry - 2022
Global Specialty Chemical Industry
– Size (USD Bn) (2020)
696
847
1,090
2015 2020 2025
CAGR 4.0%
CAGR 5.2%
GLOBAL
CHEMICALINDUSTRY

9. Specialty Chemicals – Global market segmentation
Specialty Chemicals - An opportunity for Make in India 09
Specialty chemicals are classified into the
following segments:
End-use driven segments (agrochemicals,
personal care ingredients, polymer additives,
water chemicals, textile chemicals and
construction chemicals) and
Application - driven segments (surfactants,
flavours and fragrances and dyes and
pigments).
Agrochemicals is the largest subsegment with a
share of 12% in the global Specialty chemicals
market followed with food additives and
construction chemicals with ~9% share.
Specialty Chemicals – Global market dynamics
There has been a paradigm shift in the dynamics of international trade for specialty chemicals. With the
manufacturing activity and the consumption growth shifted in favor of the Asian markets over the last
couple of decades, Asia has gone on to become a net exporter for a wide range of specialty chemicals,
which were earlier being imported from European countries and North America.
China currently commands 26% of the global market share of specialty chemicals. India’s share of the
market is around 4%. However, India’s specialty chemicals industry is predicted to grow rapidly, outpacing
China, Japan and the rest of the world in percentage terms. Its market share is expected to increase from
4% to 6% by 2026, on the back of strong revenue growth that is expected during this period.
Source: Frost and Sullivan report on Indian Specialty Chemicals Industry - 2022
Specialty chemicals market CAGR (%) among select regions (FY2020-2025)
Source: Avendus FICCI report on Indian Specialty Chemicals
Industry - 2020
Agrochemicals
Construction Chemicals
Water Chemicals
Dyes and Pigments
Nutra Ingredients
Others
Food Additives
Electronic Chemicals
Polymer Additives
Surfactants
F&F Ingredients
12%
9%
9%
8%
6%
6%
5%
5%
5%
4%
30%
7
2.5 2.5
1.5
11.2
China North America Western Europe Japan India
GLOBAL
CHEMICALINDUSTRY

10. China - the leader in the global chemical industry
Specialty Chemicals - An opportunity for Make in India 10
China is the largest chemical producer in the
world with the highest market share (39%) in the
global chemical industry followed by European
Union (EU) (15%) and United States (US) (13%).
India accounts for ~4% market share in global
chemicals market.
Till the late 1980s, the US was the industry leader
by manufacturing chemicals for domestic use in
the oil & gas industry as well as other sectors.
Later, Europe started dominating this business
through exports, while the US and Japan
remained key producers.
However, over the last two decades, there has
been a significant shift in production to emerging
markets, particularly Asia, especially in the
specialty chemicals space, on the back of strong
growth in end-user industries.This is reflected in
an increase in China's share in the global
chemicals industry from 6% in 2000 to around
39% in 2020.
There are three key factors that contributed to the
massive growth in China’s chemical industry: Source: Crisil Research Report – China blessing for Chemical Industry
Global Chemical Industry – Market Share (2020)
6%
24%
39%
29%
21%
15%
28%
17%
13%
12%
7%
4%
2%
3%
4%
23% 29% 25%
2000 2010 2020
China EU US Japan India Others
GLOBAL
CHEMICALINDUSTRY

11. 01. Government initiatives for the manufacturing sector:
Prior to 2008, Chinese government policies had focused on attracting foreign
investment through a series of favorable tax and business incentives that enabled
low-cost production for exports, leading to an influx of foreign investments into
China. For example - foreign companies in China paid a corporate tax of 15% and were
granted tax breaks that lasted for years, whereas Chinese companies paid a tax of 30%
and enjoyed no tax breaks.
The differential tax incentives for foreign investors, easy availability of credit and
relaxed environmental norms allowed industry to flourish and transformed China into
the world's largest manufacturer for a number of industries, including chemicals.
02. Self-sufficiency in feedstock:
There has been substantial capacity additions in petrochemicals in China over the last
several years. In 2018-19, China contributed 55% of the total new capacity addition in
petrochemical building blocks globally; and was expected to contribute ~70% of the
global capacity addition over the next 5 years.The Chinese Government's decision to
open up the petrochemicals sector to private investments has spurred investments by
the MNCs and private sector in integrated mega-refining and petrochemical
complexes.
03. Research and development (R&D) spend in the Chinese chemical industry:
There has been substantial capacity additions in petrochemicals in China over the last
several years. In 2018-19, China contributed 55% of the total new capacity addition in
petrochemical building blocks globally; and was expected to contribute ~70% of the
global capacity addition over the next 5 years.The Chinese Government's decision to
open up the petrochemicals sector to private investments has spurred investments by
the MNCs and private sector in integrated mega-refining and petrochemical
complexes.
Specialty Chemicals - An opportunity for Make in India 11
GLOBAL
CHEMICALINDUSTRY

12. 01. Stringent environment norms:
Specialty Chemicals - An opportunity for Make in India 12
The Chinese government started implementing stricter environmental protection
norms from January 2015. In 2017, an estimated 40% of the chemical manufacturing
capacity in China was temporarily shut down for safety inspections, with over 80,000
manufacturing units charged and fined for breaching emission limits. China’s Ministry
of Environmental Protection has been enforcing strict penalties on polluting
industries, including on chemical facilities. Additionally, in 2016, the Government of
China set a goal of shutting down or relocating nearly 1,000 chemical plants that
either used older technology or were located near theYangtze River.
The Chinese government enforced the construction of compulsory effluent treatment
plants and imposed green tax on the chemicals industry to combat pollution, resulting
in an overall increase in the cost of production, due to capital expenses towards
effluent treatment as well as a rise in cost of compliance.
02. Uncertainty created by the US-China trade war:
The trade war between US and China resulted in USA imposing a 25% tariff on USD
50 Bn worth of Chinese imports in June 2018, across two phases, which was retaliated
by China by announcing a similar levy of tariffs on imports from US worth USD 50Bn.
Chemicals and plastics comprised almost 40% of the 106 products targeted by US for
imposition of tariffs. There has subsequently been multiple rounds of tariff
announcements by both the countries followed by talks of a trade deal, creating an
atmosphere of uncertainty amongst the industry players across the globe and
affecting fresh capital spending by chemical majors.
Recent developments in China have resulted in the chemical industry growth in China losing the earlier
momentum. The domestic chemicals industry in China is witnessing a slowdown as a result of slower
economic growth. China’s GDP is projected to grow at a much lower pace over the next few years, as
against the 8-10% growth witnessed over the decade from 2009-2018. Along with this, a host of other
factors have helped initiate the big shift in chemicals manufacturing from China to other countries such as
India:
Chinese dominance – losing steam
03. Tightening of financing availability for oversupplied industries such as chemicals:
In the initial years, easy availability of credit at affordable costs aided the Chinese
chemical manufacturers to undertake huge capital investments for setting up
mega-scale plants. In 2014, however, China’s main bank supervisor announced that
the credit flow to oversupplied industries would be restricted, and this applied to
certain parts of chemical industry as well, thereby making the eligibility criteria for
new credit to such industries stricter.This has led to higher-than-average interest rates
being charged to chemical manufacturers, hampering their ability to undertake new
projects and enhance capacities.
GLOBAL
CHEMICALINDUSTRY

13. Specialty Chemicals - An opportunity for Make in India 13
04. COVID outbreak resulting in rethinking of supply chains and a move towards deglobalization:
The shutdowns and supply chain disruptions from China during the coronavirus
outbreak, drew attention to the ways in which the global specialty
chemical/pharmaceutical manufacturers have been dependent upon China. For
example, China constitutes 40% of the global API manufacturing. Companies across
the world are now adopting strategies that focus on dual or diversified sourcing such
as a China+1 strategy, reducing supply chain complexity, and localizing
manufacturing where feasible.
05. Rising labour costs in China
The labour cost (hourly cost of compensation) in China was lower than that of India till
2007. Over the last few years, this cost has more than doubled compared with India,
rendering Chinese manufacturers’ uncompetitive vis-à-vis India in terms of labour
cost.
All these factors are pushing the capital expenditure and operating costs upwards, making Chinese
chemical companies less competitive in the export market.
With China's supply chain disrupted and uncertain, global
players are looking to diversify their sourcing, and India
offers a strong alternative with comparable scale,
technology, raw materials, and supportive government
policies. India also offers a large pool of trained manpower
at relatively low costs which can facilitate R&D efforts that
are important for the growth of the specialty chemical
industry. By capturing a significant portion of the global
market away from China, the Indian chemical industry has
the potential to double in size by encouraging investment
through incentives, coupled with ease of doing business.
Source: Crisil Research Report – China blessing for Chemical Industry
Hourly cost of compensation USD/hour (China vs India)
0.7
1
1.5
1.7
0.6
1
2
4.8
2002 2006 2010 2015
India China
GLOBAL
CHEMICALINDUSTRY

14. 02
CHAPTER
THE
INDIAN CHEMICAL
INDUSTRY

15. The Indian Chemical Industry - Overview
Specialty Chemicals - An opportunity for Make in India 15
The chemical industry is a major industry in the
Indian economy.This industry contributed ~6.6% of
national gross domestic product and accounted for
~15%-17% of India’s manufacturing sector in FY20.
The chemical industry in India is one of the
fastest-growing in the world. Currently, it ranks 3rd
in Asia and 6th in the world with respect to output,
after the China, United States, Germany, Japan and
South Korea.
India’s chemical industry was estimated to be worth
USD 187 Bn in FY20 with a significant potential to
reach USD 286 Bn by FY25. In terms of demand, the
industry has grown at approximately 1.5 times the
country’s average GDP growth in the last five years
and shows a strong linkage with its GDP
.
At present, approximately 30% of India’s chemical
requirements are met by imports indicating that
there is an ample opportunity for import
substitution and the Government’s push towards
building an Aatmanirbhar Bharat (self-reliant India)
is aiding this growth.
THEINDIAN
CHEMICALINDUSTRY
Source: Ministry of Chemicals and Fertilizers, Govt. of India
Indian Chemical Industry – Size (USD Bn) (2020)
Production
175
51 39
254
6.2% CAGR
At 1.5x GDP growth
(-9% CAGR)
286
187
Imports Exports Demand Demand
FY 25 P
FY 20
Business Scenario with COVID-19 Impact
High Growth Scenario

16. Specialty Chemicals - An opportunity for Make in India 16
Trade patterns in Indian Chemical Market
Overall, India is a net importer of chemicals. However, this does not hold true across all of the chemicals
value chain.
India is largely self-sufficient when it comes to petrochemical building blocks (such as ethylene, propylene,
benzene etc.) with Reliance Industries (RIL) and public sector majors, such as ONGC, Indian Oil (IOCL),
Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), having large refining capacities.
However, majority of the petrochemical building blocks manufactured by India are channelized towards
bulk polymers, thereby making the other specialty chemical sub-segments dependent upon imports for
their feedstock requirements. As a result, India continues to be a net importer of petrochemical
intermediates and bulk chemicals. As we move downstream, towards value added specialty chemicals,
India is a net exporter, being a key supplier for a wide array of specialty chemicals for players across the
globe.
India’s chemical exports has been increasing over the years and touched USD 39Bn in 2020 at a CAGR of
~13% achieved from 2015 to 2019, compared to 7% for China.The key sub-segments likely to benefit from
higher exports in coming years would be dyes and pigments and agrochemicals, with export shares of
45-50% and 50-55%, respectively. According to World IntegratedTrade Solution (under World Bank), in 2018,
the top partner countries and regions to which India exported chemicals were United States, China, Brazil,
United Arab Emirates and Germany contributing to ~35% of the total of India’s chemical exports.
Source: Avendus FICCI report on Indian Specialty Chemicals Industry - 2020
India’s trade position in specialty chemicals value chain
Segment
India’s
Trade Flow
Petrochemical
Building Blocks
Self-Sufficient Net Importer Net Importer Net Importer
Petrochemical
Intermediates
Bulk Chemical
(organics
& Inorganic)
Specialty
Chemical
THEINDIAN
CHEMICALINDUSTRY

17. Specialty Chemicals - An opportunity for Make in India 17
India’s chemical imports were valued at around USD 51 Bn in 2020. In 2018, the top partner countries and
regions from which India imported chemicals were China, United States, Singapore, Saudi Arabia and
Korea which contributed ~50% of the India’s total chemical imports.
Source: Frost and Sullivan report on Indian Specialty Chemicals Industry - 2022
Source: Frost and Sullivan report on Indian Specialty Chemicals Industry - 2022
Share of major countries to India's Chemical Export (2018)
Share of major countries to India's Chemical Import (2018)
18.7%
8.1%
3.6% 3.1% 2.9% 2.5% 2.4% 2.2% 2.1% 1.9%
USA China Brazil UAE Germany Indoneasia UK Netherlands South Africa Belgium
28.2%
8.2%
5.1% 5.1%
3.6% 3.4% 3.3% 2.7% 2.2% 2.0%
China USA Singapore KSA Korean
Republic
Germany Japan Iran Thailand Belgium
THEINDIAN
CHEMICALINDUSTRY

18. 03
CHAPTER
INDIAN
SPECIALTY
CHEMICAL
INDUSTRY

19. Specialty Chemical Segment - India
Specialty Chemicals - An opportunity for Make in India 19
Indian specialty chemicals segment, at USD 32Bn in
2020, constitutes close to 20% of the total chemical
industry in India.
It has been consistently growing faster than the
overall chemicals industry, with a CAGR of ~12% in
the period from 2015-2020. This growth has been
driven by a combination of an increase in domestic
demand from end-user segments and strong export
growth.
India's specialty chemicals industry is quite
fragmented, with most sub-segments having a
handful of scaled up players.
Share of companies in the organized sector in the
Indian specialty chemicals market is only 30% with
the unorganized sector servicing the balance 70%.
The per capita consumption level of specialty chemicals in India is far below the global average, which
provides significant opportunities to the Indian chemical industry. Further, rapid urbanization and a
growing young population with disposable income would lead to rising demand for end-user industries
such as food processing, personal care and home care further adding to the specialty chemical sector’s
growth.
INDIANSPECIALTY
CHEMICALINDUSTRY
Source: Frost and Sullivan report on Indian Specialty Chemicals
Industry - 2022
Indian Specialty Chemical Industry -
Size (USD Bn) (2020)
18
32
64
2015 2020 2025E
CAGR 11.7%
CAGR 12.4%

20. Specialty Chemicals – Indian market segmentation
Specialty Chemicals - An opportunity for Make in India 20
Like in the global context, the Indian market for specialty chemicals is also categorised into a mix of end-use
driven segments and application-driven segments.
INDIANSPECIALTY
CHEMICALINDUSTRY
Source: Avendus FICCI report on Indian Specialty Chemicals Industry - 2020
Agrochemicals
Agrochemicals is the largest sub-segment of the Indian specialty chemicals market with a
market size of ~USD 9.2Bn. This segment historically grew at 10.0% between 2014 and
2019. About 45% of India’s agrochemical production is exported.
Dyes and Pigments
Dyes and pigments at USD 7Bn as of 2019, is the second largest sub-segment of the Indian
specialty chemicals industry having registered a growth of 7.3% from 2014-2019. A major
part of the dyes and pigments production is sold domestically because of the large volume
of demand from end-user markets such as textiles.This segment could grow as a result of
the government’s objective of establishing more than 100 smart cities, which is expected
to drive demand for paints and coatings.
Flavours and Fragrances (F&F)
Indian F&F industry stood at USD 1.4Bn as of 2019 and has witnessed a high historical
CAGR of 14.2% between 2014 and 2019. While the functional ingredients market in India is
largely organized, the base ingredient market is unorganized, with a large number of small
players.
Agrochemicals Polymer
Dyes and pigment Construction
F&F - Functional Ingredients Personal Care
Surfactants Nutra
F&F - Base Ingredients Water
Textles Other
29%
22%
4%
6%
7%
6%
4%
4%
3%
3%
3%
8%

21. Specialty Chemicals - An opportunity for Make in India 21
INDIANSPECIALTY
CHEMICALINDUSTRY
Surfactants
Surfactants industry in India stood at USD 2Bn as of 2019 and is estimated to grow at 11%
CAGR over the next 5 years with increasing penetration of products, such as cleaning
agents, detergents. The surfactants market is characterized by a large number of
unorganized players who cater to the unbranded soap and detergent manufacturers.
About 70% of the surfactants are used in home and personal care products.
Textile Chemicals
Textile chemicals industry in India registered a growth of 10%+ CAGR from 2014-2019
period and stood at USD 1.8Bn as of 2019. The strong domestic demand for textile
chemicals is because India is amongst the largest producers of textiles and garments in
the world. This segment has a large number of unorganized players. Steady growth in
textile industry and increasing value addition in the textile chemicals segment are
expected to drive the growth in this segment.
Polymer additives
Polymer additives market which registered a 12% growth from 2014 – 2019 stood at USD
1.3Bn as of 2019. This has been driven by a strong growth in end-user markets, such as
consumer durables, pipes, wires and cables, and packaging.The Indian market is largely
dominated by MNCs such as BASF
, Chemtura, and Bayer especially in value added
segments such as flame retardants, heat stabilizers and antioxidants.
Construction chemicals
Construction chemicals registered 13% CAGR from 2014 – 2019 and stood at USD 1.4Bn as
of 2019. Indian Government’s initiatives towards development of infrastructure has been a
key driving factor for growth in the Indian construction chemical market.The construction
chemicals market in India comprises of largely organized players with a healthy mix of
domestic players and MNCs.
Personal Care Chemicals
It is one of the fastest growing segments in the Indian specialty chemicals industry, having
registered a 15%+ CAGR during the period from 2014-2019 and is worth USD 1Bn as of
2019. This segment is expected to grow at 15% CAGR over the next 5 years given the
strong growth in the Indian cosmetics and personal care products market.

22. Specialty Chemicals - An opportunity for Make in India 22
INDIANSPECIALTY
CHEMICALINDUSTRY
Nutraceuticals
The nutraceutical ingredients industry in India comprises of about 3% of the global
nutraceutical ingredients industry. This segment has registered strong growth over the
past few years and stood at a size of ~USD 1Bn as of 2019. Majority of the ingredients
manufactured in India are exported, with USA and Europe being the largest consumers for
these products. Since a significant amount of R&D and innovation is required, the market
is dominated by organized players.
Water Chemicals
Indian water chemicals market registered ~15% CAGR in the 2014-2019 period and stood
at USD 0.8Bn as of 2019. Coagulants and flocculants account for the largest share of the
market at 33%, followed by disinfectants at 15%.

23. Indian Specialty Chemical Industry - Trends
Specialty Chemicals - An opportunity for Make in India 23
Indian specialty chemicals industry has been commonly categorized on the basis of the end-user industries
they serve. Indian companies have focused on developing expertise in a particular chemistry and
developed products that derive applications across a wide spectrum of industries.This has also involved
identifying means of monetizing the co-products and by-products in the same value chain. Various themes
are being adopted by players in this sector.
INDIANSPECIALTY
CHEMICALINDUSTRY
A. Specialization in select molecules and chemistries:
Some Indian specialty chemicals companies have focused on expanding into niche
molecules/segments, which form a relatively smart part of the business for multi-national companies,
thereby attracting limited competition from them.These segments offer significant growth in the Indian
context while being unattractive a size for large corporations to operate in, and hence insulate such
companies from foreign competition.These are undertaken in the following manner:
• By focusing on 2-3 niche molecules and their derivatives and building significant capacities in these
segments
• Continuous R&D effort for differentiation through expertise in process chemistry
• Investments in forward and backward integration towards building an integrated business model
An integrated business model helps the company to establish a diverse customer base spanning across
end-user industries, and provides a steady and predictable revenue stream which is resilient to cyclical
downturns in any specific end-user market.
Some examples of Indian companies who have successfully adopted this model of specialisation
successfully are as under:
B. Contract Research and Manufacturing Services (CRAMS)
Global players have been outsourcing parts of their manufacturing activity to strategic partners who
can offer stable supplies over a long-term period at competitive prices, while protecting the intellectual
property rights (IPR). CRAMS has been important because the time and cost involved in development
new molecules has been increasing due to extensive investment in R&D activities, apart from
engineering resources to commercialize and bring new products to the market. The track record of
Indian companies, process chemistry skills, low-cost manufacturing capabilities and a large base of
highly qualified and skilled manpower, make India a preferred destination for CRAMS. India's IPR
protection policies also provide a significant competitive edge over China as strong control over IPR is
a critical factor for global innovators.
Company Specialisation
Has focused on benzene chemistry and is among the largest players in the world
with 25-40% market share in various products in this segment
Aarti Industries
It has become the largest global manufacturer with 65% of global market share of
products focused on ATBS
Vinati Organics
It is among the top 3 global producers of industrial intermediates such as
Xylidines, Cumidines and Oximes
Deepak Nitrite

24. Specialty Chemicals - An opportunity for Make in India 24
INDIANSPECIALTY
CHEMICALINDUSTRY
C. Environmentally friendly specialty chemicals in India
The rising pollution and harm caused to water bodies owing to emission of harmful chemical effluents
into water is leading to rise in concern of sustainability and hence the concept of “Green Chemicals” in
India is evolving. These are products which are bio-degradable and provide higher performance and
functionality while being more environmentally benign throughout its entire life- cycle, including its
design, manufacture, use, and ultimate disposal.
Green chemicals acceptance in the market is a challenge due to the high initial cost of such products.
However, their usage over a period of time has shown a reduction in price by approximately 18-20%
leading to higher Return on Investments (“ROI”). It is a matter of time when the adoption of these new
age products will be made mandatory and obligatory. Indian government bodies such as the
Department of Science andTechnology, the Ministry of Chemicals and Fertilizers, and the Department
of Pharmaceuticals, are beginning to organize various green chemistry initiatives and in some cases
partner with SMEs to partially fund investments in green technology. There’s a clear upward trend
driven by public policies promoting environment-friendly technologies.
D. Increasing automation and digitalization
Adoption of contactless technologies and digital experiences (e.g., advanced analytics, 5G) has
increased.There is increased automation through the use of Artificial Intelligence (AI) that is being used
in production, marketing and sales, and also R&D; real time information and pattern recognition are
being used to drive better management of processes and systems. By leveraging advanced data
analytics and digital technologies, chemical companies have become more agile, innovative,
responsive, and efficient.
E. Focusing on Customer-centricity
Customer expectations and behaviors have changed dramatically over the past decade, especially in
the wake of COVID-19. In future, chemical companies could try to leverage digital technologies to
enable automated trend sensing and social media scanning (using text analytics) to identify broader
market trends and customer requirements. This customer-centric innovation, which solicits real-time
feedback through customer engagement tools, could help improve the scope, scale, and returns of R&D
efforts.

25. Factors likely to benefit Indian Specialty Chemicals Industry
Specialty Chemicals - An opportunity for Make in India 25
Over the last few years, a number of factors have been coming into play, which can benefit the overall
growth of the specialty chemicals industry in India.
INDIANSPECIALTY
CHEMICALINDUSTRY
1. Rise in demand in different end-user industries
India is one of the fastest growing consumption markets in the world, wherein the per capita specialty
chemical consumption continues to be significantly low, representing a huge potential for growth.
Growing disposable incomes, rapid urbanization are factors that are likely to drive strong growth in the
end-user industries such as pharmaceuticals, food, construction, electronics, dyes and pigments,
among others. This provides a tremendous potential for Indian companies to expand their market,
target key segments and states for demand-creation and build a dominant position for themselves in
the market.
2. China+1 strategy gaining momentum
The US-China trade war, the COVID-19 pandemic and the subsequent lockdowns in China, closure of
plants in countries such as EU and China owing to increasing environmental concerns has caused
immense disruption in the supply chain. This has opened doors for Indian manufacturers to invest
further in specialty chemicals, as global chemical companies look to de-risk their supply chains, by
looking at India as a resilient yet complementary alternative to China. India has already benefitted from
this trend, with select chemical sectors such as agrochemicals, dyes & pigments seeing increased
export demand. This export opportunity is likely to grow further as domestic players further equip
themselves to cater to this demand trend.
While India also faces threat from environmental concerns, the threat is limited to smaller players and
could serve as an opportunity for larger players to capture the market. Some of the large players have
already taken the initiative and established themselves in global markets like the EU and US with an
active export revenue share.
Growth rate of end-user industries (percent)
6.8
10.2
15.0
13.3
5.0
9.2
8.0
11.0
15.8
17.0
7.5
14.5
Textiles Real Estate Food Processing Home Care Automobiles Customer durables
Source: Specialty Chemicals Industry in India, KPMG Nov 2022
2010-15 2015-25

26. Specialty Chemicals - An opportunity for Make in India 26
INDIANSPECIALTY
CHEMICALINDUSTRY
3. Favorable government initiatives
The Government of India has formulated several policies that can facilitate the growth of this sector
such as:
a. Permitting 100% FDI under the automatic route in the chemical sector, except for hazardous
chemicals
b. Government of India has plans to establish chemical parks and bulk drug parks to facilitate chemical
production
c. PCPIR policy – A Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) would be a
specifically delineated investment region with an area of around 250 square kilometers planned for
the establishment of manufacturing facilities for domestic and export led production in petroleum,
chemicals & petrochemicals, along with the associated services and infrastructure
d. Production-linked incentive (PLI) scheme – the ministry of Chemicals and Fertilizers is planning to
bring PLI scheme for the chemical sector to boost domestic production and exports
e. Public procurement policy – As part of the Make in India scheme, procuring entities should follow
the local content criteria for a set of chemicals.
f. Chemicals Promotion and Development Scheme (CPDS) – CPDS was implemented to facilitate
growth and development of the chemical industry, and specialty chemicals such as dye and dye
intermediates.

27. Specialty Chemicals - An opportunity for Make in India 27
INDIANSPECIALTY
CHEMICALINDUSTRY
4. R&D Spending
The domestic specialty chemical industry is largely generic in nature with only a handful of companies
developing truly innovative and unique products. Even some of the larger players in India spend less
than 3% of their revenue towards R&D activities vis-à-vis 6-10% spent by their global counterparts.The
government is aiming to increase India’s public investment in R&D to ~2 per cent of GDP by FY25.The
specialty chemicals industry is also likely to raise its spending to 5-6 per cent of revenues during this
period.
Indian chemical companies have realized the importance of research and development (R&D), and are
investing in R&D efforts, and benefitting in terms of innovative, more efficient, and value-added
products.
5. M&A activities:
Scaling Up - Operations of majority of the specialty chemical manufacturers in India are at a
significantly lower scale, severely impacting their ability to be cost competitive with their Chinese
counterparts. In this context, some companies, such as those in the agrochemical segment, have
been consolidating to gain scale and lower costs, by acquiring related businesses and combining
R&D, production, sales and logistics activities.
Acquire technology and expertise - With an emphasis on acquiring technology, targeting small to
mid-sized firms in Europe, Japan, and the U.S., for acquisitions / strategic tie-ups can be beneficial
for the Indian companies with resources to expand.They can explore acquiring or partnering with
companies in these geographies with expertise in specific innovative chemistries, industry and
efficient technologies which will help in implementing advanced technologies in their domestic
manufacturing capabilities.
Diversification - Another powerful M&A motivator, is to open up new revenue streams and diluting
concentration risk.
Access to Feedstock - Acquisitions can enable Indian companies in gaining access to feedstock that
allows them to protect a competitive position and prepare for possible shortages of critical raw
materials.
0.1%
0.4%
0.6%
0.8%
1.0%
1.6%
2.3%
5.0%
Chemcon Fine Organics Laxmi Organics Clean Science Neogen
Chemicals
Tatva Chintan Ami Organics Aether
Industries
Average R&D spend as a % Revenue (FY20-22)

28. Specialty Chemicals - An opportunity for Make in India 28
INDIANSPECIALTY
CHEMICALINDUSTRY
6. Availability of skilled manpower and strong labor cost advantage
India has abundant skilled manpower, with the country producing one of the largest pools of Science,
Technology, Engineering and Mathematics graduates globally. Additionally, India has the lowest cost of
labor among the top six chemical producers. For e.g., labor costs in India are 1/3rd of China even after
adjustments for productivity.
7. Import Substitution
At present, approximately 30% of India’s chemical requirements are met by imports indicating that
there is an ample opportunity for import substitution.
The Government’s push towards building an Aatmanirbhar Bharat (self-reliant India) is aiding this
move towards import substitution. Some Indian companies have been taking advantage of this policy
and adding capacities. For example, BPCL has added downstream capacities in chemicals, where India
is a net importer such as specialty petrochemicals derived from propylene like acrylic acid, polyols and
butyl acrylates. Others competitors of BPCL are also planning to replicate this by setting up similar
units.
Source: Chemicals in India , Kearney
Manufacturing Labour Cost Comparison 2020 (USD/Hour)
2
7
27 28
44
49
India China Japan Singapore Germany USA

29. Aarti Industries plans to incur Capex of INR 3000 Cr over FY23-24 in order to
launch value-added products in the chlorotoluene chain (over 40 products in
the pipeline), concentrated nitric acid from weak nitric acid, etc
Galaxy Surfactants plans to invest INR 300 Cr over
FY23-24 and employ it towards specialty and green
surfactants and increase its specialty surfactants’
revenue contribution from 35% to 45% in the next five
years.The company is also extensively expanding its
mild surfactants category.
Deepak Nitrite plans to spend INR 1,500 Cr over
FY23-24 to introduce new upstream and downstream
phenol products, expand its existing product lines,
and enter new chemistries like fluorination and
photo-chlorination
Future Outlook
Specialty Chemicals - An opportunity for Make in India 29
INDIANSPECIALTY
CHEMICALINDUSTRY
The domestic demand growth coupled with opportunities in the export market due to the global trends
show a great opportunity for India to establish itself as a global chemical / specialty chemical
manufacturing powerhouse.The growth of the Specialty chemical industry will be driven by:
The success of the Government of India’s Make in India initiative and 100% FDI introduced for chemical
industry which will positively impact the specialty chemicals segment.
Competitive manufacturing costs, higher investments in R&D, cheaper raw material
availability/transport, strong demand from end-use segments, overall supportive ecosystem, etc are
aiding the growth of the specialty chemicals segment.
Stringent laws on anti-dumping will have a bearing on the growth of the Indian chemical market.
Within the specialty chemicals segment, manufacturing of fine chemicals (pesticide ingredients as well
API), flavour & fragrance ingredients, surfactants and dyes and pigments are expected to be the most
attractive segments in the coming years.This is due to their strong growth potential, highly differentiated
products portfolio and high penetration levels.
On the back of good opportunities for growth domestically and globally in the specialty chemicals
marketplace, Indian chemical companies have been incurring capex as they move up and / or down in the
value chain to expand their product mix through value-added and high margin products in order to capture
the growing market opportunities:
SRF plans to spend INR 15,000 Cr over the next five years, dedicating ~80% of the Capex to its
chemicals business

30. Specialty Chemicals - An opportunity for Make in India 30
INDIANSPECIALTY
CHEMICALINDUSTRY
Domestic and overseas companies have been investing in greenfield or brownfield projects in India. It has
been predicted by various analysts that capital spending in FY2023 by companies within the sector is
expected to exceed the INR 5,000 Cr spent before the pandemic in fiscal 2020.There has also been M&A
activity in the specialty chemicals space over the past few years which have enabled companies in adding
capacities.
In the Indian context, this sector has been a clear outperformer over the last 3-4 years in terms of earnings
delivery, and future growth prospects are also promising on the back of accelerated capex.
As seen in the Key performance indicators section of this Report, it is observed that the financial
performance of Indian companies in the Specialty Chemical space have shown consistent growth in
keeping with the prevailing growth seen in this sector. It can be seen that revenues of companies in this
space have grown at an average CAGR of ~ 20% in the period between FY 2018 to FY 2022, with gross
margins at ~45% and operating profits of ~23% suggesting a healthy growth in this sector and good
potential for further growth.
As per a report by Care Ratings, while a slowdown in demand from foreign countries due to near-term
recessionary conditions in major global economies could temporarily pressure profitability margins, the
sector is well-positioned for decent double-digit growth until FY30.
Themes like China+1 and import substitution are very much relevant and some companies are reaping the
benefits of the same. R&D-centric growth approach has enabled select companies to compete with China
in terms of pricing as well as quality without having a matching scale. This approach makes these
companies strong contenders as substitutes when the western world is aggressively look to reduce its
dependence on China and augurs well for the growth of this sector in India.

31. 04
CHAPTER
ANNEXURES

32. Specialty Chemicals - An opportunity for Make in India
1: Source : CaptialIQ, RBSA analysis 32
An analysis of the financial performance of select players in the Specialty Chemical space is presented1
.
The above specialty chemical companies have collectively incurred ~INR 17,300 Cr+ Capex over the period
from FY18-FY22.This is one of the factor which has contributed to revenue growth.
ANNEXUREA
KEYPERFORMANCEINDICATORS
Revenues over past 5 years
Capex incurred over past 5 years
Revenues of the companies in the specialty chemical space have grown at an average CAGR of ~20% in the
period from FY2018-FY2022.
Company Name CAGR %
Revenues (in INR Cr)
FY18 FY19 FY20 FY21 FY22
3,806
616
856
2,434
913
2,277
5,589
743
4,168
846
1,060
2,763
996
2,841
7,100
1,128
4,186
993
1,038
2,596
1,062
3,367
7,209
1,029
7,000
1,543
1,876
3,686
1,453
5,300
12,434
1,616
16%
26%
22%
11%
12%
24%
22%
21%
19%
4,506
1,242
1,133
2,784
1,179
4,577
8,400
954
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average
Company Name
Total over
FY18-FY22
Capex (in INR Cr)
FY18 FY19 FY20 FY21 FY22
615
136
51.9
56.9
48.7
170
1,300
76.6
794
69
81.8
169
61.6
369
1,056
206
1,153
77.3
72
142
108
674
1,389
310
1,307
247
61
155
579
337
1,832
174
5,183
685
313
630
896
1,988
6,792
850
17,338
1,315
156
46
108
98.7
439
1,214
83.3
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average

33. Specialty Chemicals - An opportunity for Make in India 33
Gross margins achieved by companies in specialty chemicals sector over a five year period from FY2018 –
FY2022 have averaged ~45%.
ANNEXUREA
KEYPERFORMANCEINDICATORS
Gross Margins over past 5 years
Company Name Average
Gross Margin %
FY18 FY19 FY20 FY21 FY22
41%
44%
34%
27%
55%
47%
43%
48%
42%
46%
44%
37%
29%
51%
44%
42%
53%
43%
48%
50%
40%
33%
54%
44%
46%
58%
47%
51%
45%
36%
29%
53%
43%
49%
46%
44%
47%
48%
36%
31%
53%
44%
46%
53%
45%
50%
57%
35%
36%
54%
42%
50%
59%
48%
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average
EBITDA margins achieved by companies in the specialty chemical sector in India over five-year period from
FY 2018-FY2022 range between ~20-25%.
EBITDA Margins over past 5 years
Company Name Average
EBITDA Margin %
FY18 FY19 FY20 FY21 FY22
18%
19%
19%
12%
26%
22%
17%
29%
20%
23%
19%
22%
13%
23%
20%
19%
38%
22%
23%
26%
23%
14%
26%
21%
20%
40%
24%
27%
21%
19%
11%
25%
21%
25%
27%
22%
23%
24%
20%
13%
25%
21%
21%
34%
23%
22%
35%
18%
16%
27%
22%
25%
37%
25%
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average

34. Specialty Chemicals - An opportunity for Make in India 34
PAT in the Specialty Chemical sector averaged at ~16% in the period from FY2018 to FY2022.
ANNEXUREA
KEYPERFORMANCEINDICATORS
PAT Margins over past 5 years
Company Name Average
PAT Margin %
FY18 FY19 FY20 FY21 FY22
9%
11%
11%
6%
20%
16%
8%
19%
13%
12%
10%
13%
7%
15%
14%
9%
25%
13%
13%
22%
16%
9%
38%
14%
14%
32%
20%
19%
15%
14%
7%
18%
16%
15%
21%
16%
13%
16%
13%
8%
23%
15%
12%
25%
16%
12%
24%
11%
11%
22%
16%
14%
28%
17%
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average
As seen in the above table, the Return on Equity in the Specialty Chemical sector averaged ~21% over a
five-year period from FY2018-FY2022 and reached a peak of ~ 25% in FY2020.
ROE over past 5 years
Company Name Average
ROE %
FY18 FY19 FY20 FY21 FY22
21%
21%
24%
22%
18%
19%
13%
18%
20%
19%
23%
27%
22%
14%
18%
16%
27%
21%
18%
40%
27%
22%
29%
17%
21%
26%
25%
22%
23%
27%
17%
14%
14%
22%
19%
20%
19%
29%
24%
21%
18%
16%
18%
21%
21%
15%
37%
16%
23%
16%
14%
17%
17%
20%
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average

35. Specialty Chemicals - An opportunity for Make in India
@ Market Capitalisation is based on 6-month volume-weighted average price (VWAP) for respective years
* Calculated from Mar-19 to Dec-22
@ Market Capitalisation for calculating EV is based on 6-month Volume Weighted Average Price for respective years
35
Market Capitalization of companies in this sector have been growing consistently year on year and have
averaged around 39% in the period from April 2017 to December 2022. In the period from April 2022 to
December 2022 however, in terms of the global economic turmoil and the resultant corrections in the stock
markets, some of the Indian companies stock prices have also shown corrections and overall growth in
their market capitalisation has slowed down.
ANNEXUREA
KEYPERFORMANCEINDICATORS
Market Capitalization over past 5 years
Company Name CAGR %
Market Capitalization@ (in INR Cr) as at
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Dec-22
9,971
1,244
NA
5,950
3,901
12,521
10,805
4,751
13,189
1,521
3,522
3,985
3,312
13,616
12,645
8,091
15,649
2,639
6,242
5,323
5,888
22,124
19,552
10,229
35,244
17,080
11,532
10,838
18,950
43,732
68,218
20,403
26,864
14,970
19,040
10,797
21,701
47,823
72,983
21,228
23%
69%
43%*
13%
44%
33%
50%
37%
39%
21,684
9,385
7,643
7,237
12,629
34,084
31,220
13,022
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average
EV/EBITDA Multiples over past 5 years
Company Name Average
EV/EBITDA @
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Dec-22
17x
12x
NA
22x
15x
25x
14x
21x
18x
15x
10x
15x
12x
12x
23x
12x
18x
15x
17x
10x
25x
15x
20x
32x
15x
24x
20x
19x
52x
31x
28x
50x
37x
22x
47x
36x
23x
45x
25x
20x
52x
32x
21x
37x
32x
19x
25x
27x
19x
31x
30x
17x
31x
25x
23x
21x
37x
16x
38x
32x
16x
36x
27x
Aarti Industries
Alkyl Amines Chemicals
Fine Organic Industries
Galaxy Surfactants
Navin Fluorine International
PI Industries
SRF
Vinati Organics
Average
The valuations of Indian companies in the specialty chemicals space have been rising in line with their
operating performances. Average EBITDA multiples of companies in this space which were around 18x in
FY2018 have grown to 32x as of December 2022 and averaged around 25x over the period from FY2018 to
Dec2022.

36. Specialty Chemicals - An opportunity for Make in India 36
ANNEXUREB
RECENTTRANSACTIONS
Recent M&A transactions in Specialty Chemicals Space
Date Target/Issuer Buyers/Investors
EV/LTM
Revenue
Multiple
Stake %
Transaction
Value
(INR Cr)
Target Segment /
Products
Apr-22 Khyati
Chemicals
Dorf-Ketal
Chemicals India
Optical brightening agents
- Performance Chemicals
100.00% 350 1.4x
Mar-23 BuLi Chemicals
India
Neogen
Chemicals
N Butyl Lithium for
pharma and agrochemical
100.00% 25 0.4x
Jun-22 Kudos Chemie UPL Synthetic Caffeine,
theobromine, adenie
100.00% 40 NA
Jul-21 Tristar
Intermediates
Rossari Biotech Preservatives, Aroma
chemicals, and home /
personal care additives
100.00% 120 1.1x
Jun-21 Unitop
Chemicals
Rossari Biotech Surfactants, Agro-chemical
additives, pesticide
emulsifiers
100.00% 421 1.5x
Apr-21 Privi Speciality
Chemicals
Vivira
Investment and
Trading Co.;
Moneymart
Securities.
Aroma and Fragrance
chemicals
48.75% 1,220 4.0x
Mar-22 S P S Processors Bodal Chemicals Dye Intermediates
30.00% 30.7 NA
Sep-21 Best Crop
Science
Best Agrolife Crop Protection
100.00% 101.6 NA
Recent Mergers / Acquisitions (M&A) activities in the Indian Specialty
Chemicals Industry
There has been M&A activity in the specialty chemicals space over the past few years. A number of
companies have made acquisitions within India, enabling them to add newer products into their portfolio
or enabling them to add capacities. Some Indian companies have also made cross-border acquisition.The
M&A activity has been driven pre-dominantly in the agrochemicals segment with acquisitions led by
industry leaders such as UPL Ltd.
Domestic Transaction

37. Specialty Chemicals - An opportunity for Make in India
Source: Venture Intelligence, Capital IQ, Public Domain
NA: Not Available
37
ANNEXUREB
RECENTTRANSACTIONS
Recent M&A transactions in Specialty Chemicals Space
Date Target/Issuer Buyers/Investors
EV/LTM
Revenue
Multiple
Stake %
Transaction
Value
(INR Cr)
Target Segment /
Products
Feb-22 Sener Boya
KimyaTekstil
Sanayi veTicaret
Anonim Sirketi
Bodal
Chemicals
Textile Dyes
20.00% 32 2.2x
Oct-20 Huntsman
Advanced
Materials
Solutions
Pidilite
Industries
Adhesives & Sealants
100.00% 2,100 5.3x
Dec-19 Masterbatch
Business of
Clariant
Chemicals India
PolyOne
Polymers India
Colors & Additives
100.00% 426 1.5x
Jun-16 Excel Crop Care Sumitomo
Chemical India
Crop Protection, Active
Ingredients, Bio-pesticides
30.00% 277
0.7x
Nov-19 Yoloo (Laoting)
Bio-technology
Company
UPL Crop Protection
75.00% 95.7 2.7x
May-19 Sener Boya
KimyaTekstil
Sanayi veTicaret
Anonim Sirketi
Bodal
Chemicals
Textile Dyes
80.00% 32
NA
Cross-Border Transactions

38. Specialty Chemicals - An opportunity for Make in India 38
• Business & Equity Valuation
• 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
Valuation
• Valuation Services
• Damages & Loss of Profit Analysis
• Independent Expert testimony
• Anti-trust & Competition Advisory
• Post-Acquisition Disputes, Joint Venture & Shareholder Disputes
• Civil & Construction Disputes, Real Estate Disputes
• Intellectual Property Rights Dispute
Dispute & Litigation Support
• 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
Transaction Services (Due Diligence)
• Insolvency Professional services as per IBC
• Turnaround Advisory and Business transformation
• Interim Management Services
• CRO (Chief Restructuring Officer) Services
• Process Improvement and Financial Restructuring
• Outside NCLT – Restructuring Services
• Priority and Interim Funding
• Process Advisors
• Pre-pack and Cross Border Insolvency
• Advisor to Committee of Creditors
• Preparation of Resolution Plan and Information Memorandum
• Independent Bid Evaluation Services
Restructuring
Deal Tax Advisory (Strategic, IBC, PE/VC)
• Tax Due-Diligence
• Tax Structuring
• Deal Negotiation Review
• Transaction Documentation Review
• Post-Deal Integration
Corporate Restructuring
• Group Restructuring
• Financial/Capital Restructuring
Succession Planning
Holistic Implementation Support
• Merger/Amalgamation
• Demerger/Spin-off
• Capital Reduction
Transaction Tax
• Share Buyback
• Business Transfers
• Liquidation/Wind-up
• M&A Advisory:
• Sell Side & Buy Side
• Domestic & Cross Border
• Partner Search, Joint Ventures & Strategic Alliances
• Government Disinvestment & Privatization
• Fund Raising - Equity, Mezzanine, Structured Finance & Debt
(Corporate & Project Finance)
• Distressed Investment Banking - One-Time Settlement, Priority
and Interim Funding, Rescue Financing, and Buyouts
• Capital Market Advisory
Investment Banking (Category 1 Merchant Bank)
Risk Consulting
Strategic & Risk Advisory Services
• Techno Economic Feasibility Studies & Viability assessment
• Business Plan Review
Technical Support Services
• Lender’s & Investor’s / Independent Engineer Services
• Technical Due Diligence, Technical Opinions
• Chartered Engineers Opinion & Certification
• Project Cost Investigation and Monitoring
Agency for Specialized Monitoring (ASM)
• Cash outflow / Inflow and project monitoring, Ensure the end
usage of the Fund
Financial & Treasury Risk Advisory
• Assessment of risks - ALM, Credit, Market, Interest Rate &
Liquidity Risk
• Asset Quality Review & Stress Testing
• Assessment of Expected Credit Loss
Business Risk Advisory
• Risk based Internal Audits & Enterprise Risk Manangement (ERM)
• Flow Chart Base Process Mapping & Process Excellence Studies (SOP)
• Compliances Studies, Assets management & Business support
Services

39. Specialty Chemicals - An opportunity for Make in India 39
Contact Us
Research Analysts
Janvi Panchal
+91 22 6130 6029
janvi.panchal@rbsa-advisors.com
Prashant Pai
+91 22 6130 6067
prashant.pai@rbsa-advisors.com
Ajay Malik
Managing Director & Head
Investment Banking
+91 22 6130 6015
ajay.malik@rbsa.in
Vinod Nair
Managing Director & Head
Risk Advisory Services
+91 22 6130 6015
vinod.nair@rbsa.in
Management
Rajeev R. Shah
Managing Director & CEO
+91 79 4050 6070
rajeev@rbsa.in
Manish Kaneria
Managing Director & COO
Co - Head Valuation
+91 79 4050 6090
manish@rbsa.in
Mitali Shah
Managing Director & Head
Banking & Restructuring
+91 79 4050 6050
mitali@rbsa.in
India Offices Global Offices
Project Leader Creatives
Tarun Vataliya
+91 79 4050 6033
tarun.vataliya@rbsa.in
1121, Building No. 11, 2nd
Floor,
Solitaire Corporate Park, Chakala,
Andheri Kurla Road, Andheri (E),
Mumbai - 400 093
Tel: +91 22 6130 6000
Mumbai
6-3-248/B/1, 4th
Floor,
Dhruv Arcade,
Road Number 1, Banjara Hills,
Lane opp. Kotak Bank,
Hyderabad - 500 034
M: +91 90526 60300
Tel: +91 40 4854 6254
Hyderabad
Bengaluru
104, 1st
Floor, Sufiya Elite,
#18, Cunningham Road,
Near Sigma Mall,
Bangalore - 560 052
M: +91 97435 50600
Tel: +91 80 4112 8593
Dubai
6001 Beach Road,
#22-01 Golden MileTower,
Singapore - 199589
M: +65 8589 4891
Email: singapore@rbsa.in
Singapore
Unit No. 1102, Al Jamal Building,
Al Ghatfah St, Al Danah,
Abu Dhabi
M: +971 52 617 3699
Email: abudhabi@rbsa.in
Abu Dhabi
2001-01, Level 20, 48 Burj GateTower,
Downtown, Sheikh Zayed Road,
PO Box 29734, Dubai, UAE
M: +971 52 382 2367
+971 52 617 3699
Tel: +971 4518 2608
Email: dubai@rbsa.in
Ahmedabad
912, Venus Atlantis Corp. Park,
Anand Nagar Road,
Prahladnagar,
Ahmedabad - 380 015
Tel: +91 79 4050 6000
2nd
Floor, IAPL House,
23 South Patel Nagar,
New Delhi - 110 008
M: +91 99585 62211
Tel: +91 11 2580 2300
Delhi
Ravishu Shah
Managing Director
Co - Head Valuation
+91 22 6130 6093
ravishu.shah@rbsa.in
Ravi Mehta
Managing Director & Head
TransactionTax
+91 22 6130 6052
ravi.mehta@rbsa.in
Chetan Khandhadia
Managing Director & Head
Transaction Services
+91 22 6130 6095
chetan.khandhadia@rbsa.in
Gift City (IFSC)
Unit No. 16, Office No. 7,
Wing D GIFT Aspire Block 12,
Road 1-D, GIFT SEZ,
Gandhinagar - 382 355
M: +91 97243 43847