Page 14
Technical/Industry Related Terms/Abbreviations
SUMMARY OF THE OFFER DOCUMENT
Unless otherwise indicated, industry and market data used in this section has been derived from industry report
titled ‘Industry Report on Specialty Chemicals Sector’ prepared and issued by CARE, appointed by us pursuant
to engagement letter dated December 30, 2024 exclusively commissioned and paid for by us in connect with the
Offer. Unless otherwise indicated, all industry and other related information derived from the CARE Report and
included herein with respect to any particular year refers to such information for the relevant calendar year. CARE
was appointed by our Company and is not connected to our Company, our Directors, our Promoters, our Key
Managerial Personnel, or our members of Senior Management or the BRLM. A copy of the CARE Report is
available on the website of our Company at www.prasolchem.com/investor-relations/ from the date of the Draft
Red Herring Prospectus till the Bid/ Offer Closing Date.
This section is a general summary of the terms of the Offer and of certain disclosures included in this Draft Red
Herring Prospectus and is not exhaustive, nor does it purport to contain a summary of all the disclosures in this
Draft Red Herring Prospectus or all details relevant to prospective investors. This summary should be read in
conjunction with, and is qualified in its entirety by, the more detailed information appearing elsewhere in this
Draft Red Herring Prospectus, including ‘Risk Factors’, ‘Industry Overview’, ‘Our Business’, ‘Capital Structure’,
‘The Offer’ and ‘Outstanding Litigations and Other Material Developments’ on pages37,200,274,99,83, and434 respectively.
Summary of the primary business of our Company
Our Company was incorporated in 1992 and with over 33 years of experience in the specialty chemicals industry,
we are a forward integrated manufacturer of acetone and phosphorous based specialty chemicals and other
specialty chemicals involving complex and differentiated chemistries. Our products find diversified applications
across numerous industries with 5 key segments being: (a) performance chemicals (including lubricant additives
and mining chemicals); (b) PICA viz., paints, inks construction, & adhesives; (c) pharmaceuticals; (d)
agrochemicals; and (e) home and personal care. As of July 31, 2025 our comprehensive product portfolio
comprised over 150 specialty chemical products.
Summary of industry
According to the CARE Report, India's chemical industry holds a prominent position globally, ranking 6th in
production and 14th in exports. Specialty chemicals, particularly agrochemicals, dyes, and pigments, represent
more than half of India's chemical exports. Specialty Chemicals, known for their tailored applications, represented
20% of the market share of global chemicals industry in 2024, with growth expected to reach 21–23% market
share by 2029, reflecting rising demand for customized and high-performance solutions. The specialty market is
expected to grow at CAGR of 8% reaching $1,748 billion until 2029. Asia Pacific holds the largest share,
increasing from 51% in 2024 to 54% in 2029.
Names of the Promoters
Our Promoters are Nishith Rajnikant Shah, Gaurang Natwarlal Parikh, Dhaval Nalin Parikh, Pankil Nishith
Dharia, Sachin Jatin Parikh, Rakesh Gupta, Nishith Rasiklal Dharia, Kunal Tushar Dharia, Suketu NavinchandraParikh and Usha Rajnikant Shah. For further details, see ‘Our Promoters and Promoter Group’ on page330.
Offer Size
- (1) The Offer has been authorised by our Board pursuant to the resolution passed at its meeting dated February 21, 2025,
and the Fresh Issue has been authorised by our Shareholders pursuant to a special resolution passed at their meeting
dated June 18, 2025. Further, our Board has taken on record the approval for the Offer for Sale by the Selling
Shareholders pursuant to the resolution passed at its meeting dated October 14, 2025.
- (2) Each Selling Shareholder severally and not jointly confirm that the Equity Shares being offered by the Selling
Shareholders are eligible for being offered for sale pursuant to the Offer in terms of Regulation 8 of the SEBI ICDR
Regulations. Each of the Selling Shareholder has, severally and not jointly, consented for the sale of their respective
-
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
AND CURRENCY OF PRESENTATION
Certain Conventions
All references to ‘India’ contained in this Draft Red Herring Prospectus are to the Republic of India. All references
to the ‘Government’, ‘Indian Government’, ‘GoI’, ‘Central Government’ are to the Government of India and all
references to the ‘State Government’ are to the government of the relevant state. All references to ‘US’, ‘USA’ or
‘United States’ are to the United States of America, together with its territories and possessions.
Page Numbers
Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page
numbers of this Draft Red Herring Prospectus.
Time
Unless otherwise specified, any time mentioned in this Draft Red Herring Prospectus is in Indian Standard Time.
Unless indicated otherwise, all references to a year in this Draft Red Herring Prospectus are to a calendar year.
Financial Data
Our Company’s financial year commences on April 1 of the immediately preceding calendar year and ends onMarch 31 of that particular calendar year. Accordingly, all references to a particular Fiscal or Financial Year,
unless stated otherwise, are to the 12 month period commencing on April 1 of the immediately preceding calendar
year and ending on March 31 of that particular calendar year.
Unless stated, or, the context requires, otherwise all financial information and financial ratios in this Draft Red
Herring Prospectus is derived from our Restated Financial Information. The Restated Financial Information
comprise the restated statement of assets and liabilities as at the three month ended June 30, 2025 and the financial
years ended March 31, 2025, March 31, 2024 and March 31, 2023, the restated statement of profit and loss
(including other comprehensive income), the restated statement of cash flows, the restated statement of changes
in equity and basis of preparation and significant accounting policies for the three month ended June 30, 2025 and
the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 and the notes to restated financial
information as approved by our Board and prepared in terms of the Section 26 Part I of Chapter III of the
Companies Act, SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses (Revised
January, 2019) issued by the ICAI, each as amended The Restated Financial Information have been prepared to
comply with the Indian Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read
with the Companies (Indian Accounting Standards) Rules, 2015, (as amended from time to time), presentation
requirements of division II of Schedule III to the Companies Act, 2013, as applicable to the financial statementsand other relevant provisions of the Companies Act, 2013. For further information, see ‘Restated Financial
Information’ on page342.
Non-GAAP Measures
Certain measures included and presented in this Draft Red Herring Prospectus, for instance Operating EBITDA,
Operating EBITDA margin, PAT margin, Adjusted RoAE, Adjusted RoCE and Net Debt to Equity (collectively“Non-GAAP Measures”) are supplemental measures of our performance and liquidity that are not required by,
or presented in accordance with, Ind AS, IFRS or U.S. GAAP. Furthermore, these Non-GAAP Measures, are not
a measurement of our financial performance or liquidity under Indian GAAP, IFRS or U.S. GAAP and should not
be considered as an alternative to net profit/loss, revenue from operations or any other performance measures
derived in accordance with Ind AS, IFRS or U.S. GAAP or as an alternative to cash flow from operations or as a
measure of our liquidity. In addition, Non-GAAP Measures used are not a standardised term, hence a direct
comparison of Non-GAAP Measures between companies may not be possible. Other companies may calculate
Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. For further details see“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP
Measures” and ‘Risk Factor – Certain non-GAAP financial measures and certain other statistical information
relating to our operations and financial performance such as Operating EBITDA, Operating EBITDA margin,
PAT margin, Adjusted RoAE, Adjusted RoCE and Net Debt to Equity have been included in this Draft Red Herring
Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined
by Ind AS and may not be comparable.’ on page420 and71.
Page 39
Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained or
derived from publicly available information as well as a report titled ‘Industry Report on Specialty Chemicals
Sector’ dated October 7, 2025, prepared and issued by CARE Analytics and Advisory Private Limited (CARE),
appointed by us pursuant to an engagement letter dated December 30, 2024, and exclusively commissioned and
paid for by us for the purposes of confirming our understanding of the industry in connection with the Offer
(CARE Report) in connection with the Offer. Additionally, certain industry related information in “Industry
Overview”, “Our Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Conditionand Results of Operation” on pages200,274,37 and416, respectively, has been derived from the CARE Report.
A copy of the CARE Report is available on the website of our Company at www.prasolchem.com/investor-
relations/ from the date of this Draft Red Herring Prospectus until the Bid/Offer Closing Date and has also beenincluded in “Material Contracts and Documents for Inspection-Material Documents” on page514. CARE,
pursuant to their consent letter dated October 7, 2025 has accorded their no objection and consent to use the CARE
Report, in full or in part, in relation to the Offer. CARE was appointed by our Company and pursuant to their
consent letter, has confirmed that they are an independent agency, and that they are not connected to our Company,
our Directors, KMPs, members of Senior Management, our Promoters and Book Running Lead Manager. Forrisks in relation to commissioned reports, see ‘Risk Factor – This Draft Red Herring Prospectus contains
information from an industry report prepared by CARE which we have commissioned and paid for.’ on page71.
Except for the CARE Report, we have not commissioned any report for purposes of this Draft Red Herring
Prospectus and any market and industry related data, other than that derived from the CARE Report, used in this
Draft Red Herring Prospectus has been obtained or derived from publicly available documents and other industry
sources.
While there are excerpts from the CARE Report that have been reordered or re-classified by us for the purposes
of presentation in this Draft Red Herring Prospectus, there are no material parts, information or data from the
CARE Report which would be relevant for the Offer and that have been left out or changed in any manner. The
data used in these sources may have been for the purposes of presentation. Data from these sources may also not
be comparable, on account of there being no standard data gathering methodologies in the industry in which the
business of our Company is conducted, and methodologies and assumptions may vary widely among different
industry sources. Accordingly, the extent to which the market and industry data used in this Draft Red HerringProspectus is meaningful depends on the reader’s familiarity with and understanding of the methodologies usedin compiling such data.
Disclaimer
Industry sources and publications generally state that the information contained therein has been obtained from
sources generally believed to be reliable, but their accuracy, completeness and underlying assumptions are not
guaranteed, and their reliability cannot be assured and accordingly, investment decisions should not be based on
such information. The data used in these sources may have been re-classified by us for the purposes of
presentation. Data from these sources may also not be comparable. Industry sources and publications are also
prepared based on information as of specific dates and may no longer be current or reflect current trends. Industry
sources and publications may also base their information on estimates, projections, forecasts and assumptions that
may prove to be incorrect. Such data involves risks, uncertainties and numerous assumptions and is subject tochange based on various factors, including those discussed in the ‘Risk Factors’ on page37. Accordingly,
investors should not place undue reliance on, or base their investment decision on this information.
Further, the extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningfuldepends on the reader’s familiarity with and understanding of the methodologies used in compiling such data.There are no standard data gathering methodologies in the industry in which we conduct our business, and
methodologies and assumptions may vary widely among different industry sources. In addition, certain data in
relation to our Company used in this Draft Red Herring Prospectus has been obtained or derived from the CARE
Report which may differ in certain respects from our Restated Financial Information as a result of, inter alia, the
methodologies used in compiling such data. Accordingly, investment decision should not be made based on such
information.
In accordance with the SEBI ICDR Regulations, “Basis for Offer Price” on page184. includes information
relating to our peer group companies. Such information has been derived from publicly available sources
specified herein.
SECTION II: RISK FACTORS
An investment in equity shares involves a high degree of risk. You should carefully consider each of the following
risk factors together with all other information set forth in this Draft Red Herring Prospectus, including the risks
and uncertainties described below, before making an investment in the Equity Shares. The risks and uncertainties
described below are not the only risks that we currently face or are relevant to us, our Equity Shares, the industry
in which we operate or to India or the other geographies in which we sell our products. Additional risks and
uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect
our business, prospects, results of operations, cashflows and financial condition. In order to obtain a completeunderstanding about us, investors should read this section in conjunction with “Our Business”, “Industry
Overview”, and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” onpages274,200 and416, respectively, as well as the financial statements, including the notes thereto, and other
financial information included elsewhere in this Draft Red Herring Prospectus.
If any or some combination of the following risks, or other risks that are not currently known or believed to be
adverse, actually occur, our business, results of operations, cashflows and financial condition could suffer, the
trading price of, and the trading price of the Equity Shares could decline, and you may lose all or part of your
investment. In making an investment decision with respect to this Offer, you must rely on your own examination
of our Company, our business, and the terms of this Offer, including the merits and risks involved and you should
consult your tax, financial and legal advisors about the particular consequences to you of an investment in the
Equity Shares. Prospective investors should pay particular attention to the fact that our Company is incorporated
under the laws of India and is subject to a legal and regulatory environment, which may differ in certain respects
from that of other countries. This Draft Red Herring Prospectus also contains forward-looking statements that
involve risks, assumptions, estimates and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors, including the considerations
described below and elsewhere in this Draft Red Herring Prospectus. See “Forward-Looking Statements” onpage35.
Unless otherwise stated or the context otherwise requires, the financial information used in this section is derivedfrom our Restated Financial Information. For further details, please see “Restated Financial Information” onpage342.
Unless otherwise indicated, industry and market data used in this section has been derived from industry
publications, in particular, the report titled ‘Industry Report on Speciality Chemicals Sector’ dated October 7,
2025 (CARE Report), prepared and issued by CARE, exclusively commissioned and paid for by our Company in
connection with the Offer. Unless otherwise indicated, all financial, operational, industry and other related
information derived from the CARE Report and included herein with respect to any particular year, refers to such
information for the relevant calendar year. CARE was appointed by our Company and is not connected to our
Company, our Directors, our Promoters, our Key Managerial Personnel, Senior Management or BRLM. A copy
of the CARE Report is available on the website of our Company at https://prasolchem.com/investor-relations/.
For further information, see ‘Risk Factor - Certain sections of this Draft Red Herring Prospectus contain
information from CARE Report which has been exclusively commissioned and paid for by our Company’ on page71. Also see ‘Certain Conventions, Presentation of Financial, Industry and Market Data and Currency of
Presentation’ on page32.
Internal Risk Factors
- 1. Our business and the demand for our products is reliant on the success of our customers’ products withend consumers and any decline in the demand for the end products could have an adverse impact on our
business, results of operations, cash flows and financial condition.
We are a forward integrated manufacturer of acetone and phosphorous based specialty chemicals and other
specialty chemicals involving complex and differentiated chemistries and our revenue is attributable to (a)
performance chemicals (including lubricant additives and mining chemicals); (b) PICA viz., paints, inks
construction, & adhesives; (c) pharmaceuticals; (d) agrochemicals; and (e) home and personal care
(Application Industries). Set out below is our product offering along with the revenue generated, in terms
of percentage of the revenue from operations, from each of our product categories, in the 3 months ended
June 30, 2025 and in Fiscal 2025, Fiscal 2024 and Fiscal 2023, based on our Restated Financial Information:
- -
Page 81
cause an AAEC is considered void and results in the imposition of substantial penalties. Further, any
agreement among competitors which directly or indirectly involves the determination of purchase or sale
prices, limits or controls production, shares the market by way of geographical area or number of guests in
the relevant market or directly or indirectly results in bid-rigging or collusive bidding is presumed to have an
AAEC in the relevant market in India and is considered void. The Competition Act also prohibits abuse of a
dominant position by any enterprise. On March 4, 2011, the Government issued and brought into force the
combination regulation (merger control) provisions under the Competition Act with effect from June 1, 2011.
These provisions require acquisitions of shares, voting rights, assets or control or mergers or amalgamations
that cross the prescribed asset and turnover based thresholds to be mandatorily notified to and pre-approved
by the Competition Commission of India (CCI). Additionally, on May 11, 2011, the CCI issued Competition
Commission of India (Procedure for Transaction of Business Relating to Combinations) Regulations, 2011,
as amended, which sets out the mechanism for implementation of the merger control regime in India. The
Competition Act aims to, among others, prohibit all agreements and transactions which may have an AAEC
in India. Consequently, all agreements entered into by us could be within the purview of the Competition Act.
Further, the CCI has extra-territorial powers and can investigate any agreements, abusive conduct or
combination occurring outside India if such agreement, conduct or combination has an AAEC in India.
However, the impact of the provisions of the Competition Act on the agreements entered into by us cannot
be predicted with certainty at this stage. We are currently not a party to an outstanding proceeding, nor have
we received any notice in relation to non-compliance with the Competition Act and the agreements entered
into by us. However, if we are affected, directly or indirectly, by the application or interpretation of any
provision of the Competition Act, or any enforcement proceedings initiated by the CCI, or any adverse
publicity that may be generated due to scrutiny or prosecution by the CCI or if any prohibition or substantial
penalties are levied under the Competition Act, it would adversely affect our business, results of operations
and prospects.
- 64. If inflation were to rise in India, we might not be able to increase the prices of our products at a
proportional rate in order to pass costs on to our clients thereby reducing our margins.
Inflation rates in India have been volatile in recent years, and such volatility may continue in the future. India
has experienced high inflation in the recent past. Increased inflation can contribute to an increase in interest
rates and increased costs to our business, including increased costs of transportation, wages, raw materials
and other expenses relevant to our business. High fluctuations in inflation rates may make it more difficult
for us to accurately estimate or control our costs. Any increase in inflation in India can increase our expenses,
which we may not be able to adequately pass on to our clients, whether entirely or in part, and may adversely
affect our business and financial condition. In particular, we might not be able to reduce our costs or increase
the price of our products to pass the increase in costs on to our clients. In such case, our business, results of
operations, cash flows and financial condition may be adversely affected.
Further, the Government of India has previously initiated economic measures to combat high inflation rates,
and it is unclear whether these measures will remain in effect. There can be no assurance that Indian inflation
levels will not worsen in the future.
- 65. Investors may not be able to enforce a judgment of a foreign court against our Company outside India.
Our Company is incorporated under the laws of India. Our Company’s assets are located in India and all of
our Company’s Directors and Key Managerial Personnel are residents of India. As a result, it may not be
possible for investors to effect service of process upon our Company or such persons in jurisdictions outside
India, or to enforce against them judgments obtained in courts outside India.
India has reciprocal recognition and enforcement of judgments in civil and commercial matters with a limited
number of jurisdictions, which includes, the United Kingdom, Singapore, Hong Kong and United Arab
Emirates. A judgment from certain specified courts located in a jurisdiction with reciprocity must meet certain
requirements of the Code of Civil Procedure, 1908, of India (Civil Code). The United States and India do not
currently have a treaty providing for reciprocal recognition and enforcement of judgments in civil and
commercial matters. Therefore, a final judgment for the payment of money rendered by any federal or state
court in a non-reciprocating territory, such as the United States, for civil liability, whether or not predicated
solely upon the general securities laws of the United States, would not be enforceable in India under the Civil
Code as a decree of an Indian court.
Page 98
C N K & Associates LLP
3rd Floor, Mistry Bhavan,
Dinshaw Vachha Road, Churchgate,
Mumbai, India, 400020Telephone: 91 22 6623 0600
Email:[diwakar@cnkindia.com](mailto:diwakar@cnkindia.com)
Contact Person: Diwakar Sapre
Peer review number: 017169
Firm Registration number: 101961W/W-100036
Changes in the auditors
Except as provide below: there has been no change in the Statutory Auditors of our Company during the last
3 years preceding the date of this Draft Red Herring Prospectus:
*S.V. Shanbhag & Co. and C N K & Associates LLP were appointed as joint auditors on January 15, 2022.
Registrar to the Offer
KFin Technologies Limited
Selenium Tower B, Plot No.31 and 32,
Gachibowli, Financial District, Nanakramguda,
Serilingampally, Hyderabad 500 032,
Telangana, India
Tel: +91 40 6716 2222/ 1800 309 4001
E-mail: prasol.ipo@kfintech.com
Investor grievance e-mail: einward.ris@kfintech.com
Website: www.kfintech.com
Contact person: M. Murali Krishna
SEBI registration no.: INR000000221
Banker(s) to the Offer
Escrow Collection Bank
[●]
Public Offer Bank
[●]
Refund Bank
[●]
Sponsor Banks
[●]
Bankers to our Company
Page 190
- 2. PRICE/ EARNING (P/E) RATIO IN RELATION TO THE PRICE BAND OF ₹[●] TO ₹[●] PER EQUITYSHARE:
* To be updated in the Prospectus.
- 3. INDUSTRY PEER GROUP P/E RATIO* (Period)
- (1) The highest and lowest industry P/E shown above is based on the peer set provided below under “6. Comparison of
Accounting Ratios with Listed Industry Peers”.
- (2) The industry average has been calculated as the arithmetic average P/E of the peer set provided below.
- (3) P/E figures for the peer are computed based on closing market price as on October 6, 2025 on BSE, divided by Diluted
EPS (on consolidated basis) based on the financial results declared by the peers available on website of
www.bseindia.com for the Financial Year ending March 31, 2025
- 4. RETURN ON NET WORTH (“RoNW”):
*Not annualised
Notes:
(1) Return on Net Worth (%) = Net profit / (loss) after Tax for the period / year as divided by Equity attributable to the owners
of the Company, as at the end of the period / year.
(2) Net worth means the aggregate value of the paid up share capital of the Company and all reserves created out of profits
and securities premium account and credit balance of profit and loss account, after deducting the aggregate value of the
accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per Restated Financial Information
of Assets and Liabilities of the Company but does not include reserves created out of revaluation of assets, write-back of
depreciation and amalgamation as at the end of the period / year.
(3) Weighted average = Aggregate of financial year-wise weighted Net Worth divided by the aggregate of weights i.e. ((Net
Worth x Weight) for each financial year)/(Total of weights).
- 5. NET ASSET VALUE (“NAV”) PER EQUITY SHARE AS PER LAST BALANCE SHEET:
Notes:
*Offer Price per Equity Share will be determined on conclusion of the Book Building Process and this is not derived from
Restated Financial Information.
(1) Net Asset Value per Equity Share = Equity attributable to owners of the Company divided by weighted average numbers
of equity shares outstanding during the year.
Page 191
- 6. Comparison of Accounting Ratios with Listed Industry Peers
Source:
Note: Financial Information of the Peer group companies has been sourced from the consolidated financial statements for the
year ended March 31, 2025 as disclosed on the website of the Stock Exchanges.
(1) Basic EPS has been calculated as the Net Profit/(loss) for the year/period attributable to equity shareholders of the
Company divided by total weighted average number of equity shares outstanding as on March 31, 2025.
(2) Diluted EPS refers to the Diluted EPS sourced from the consolidated financial statements of the respective peer group
companies for the year ended March 31, 2025.
(3) NAV is computed as the closing net worth divided by the closing outstanding number of equity shares as on March 31,
2025.
(4) P/E Ratio has been computed based on the closing market price of equity shares on BSE on October 6, 2025, divided by
the Diluted EPS provided under Note 1 above.
(5) Net worth has been calculated as the aggregate value of the paid up share capital of the Company and all reserves created
out of profits and securities premium account and credit balance of profit and loss account, after deducting the aggregate
value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per Restated Financial
Information of Assets and Liabilities of the Company but does not include reserves created out of revaluation of assets, write-
back of depreciation and amalgamation as on March 31, 2025.
- 7. Key Performance Indicators
The table below sets forth the details of our Key Performance Indicators that our Company considers have a
bearing for arriving at the basis for Offer Price. The Key Performance Indicators set forth below have been
approved by our Audit Committee pursuant to the resolution at its meeting dated October 14, 2025. Further, our
Company’s Audit Committee has on October 14, 2025 taken on record that other than the Key Performance
Indicators set out below, our Company has not disclosed any other Key Performance Indicators during the 3 years
preceding the date of this Draft Red Herring Prospectus to its investors.
Additionally, the Key Performance Indicators have been certified by our Statutory Auditors, C N K & Associates
LLP, Chartered Accountant, pursuant to a certificate dated October 14, 2025, who hold a valid certificate issued
Page 192
by the Peer Review Board of the ICAI. The Statutory Auditors certificate dated October 14, 2025 has been
included in the section ‘Material Contracts and Documents for Inspection’ of this Draft Red Herring Prospectus.
The KPIs disclosed below have been used historically by our Company to understand and analyse the operational
and the financial performance, which in result, helps it in analysing the growth of various verticals in comparison
to its listed peers, and other relevant and material KPIs of the business of our Company that have a bearing on
arriving at the Basis for Offer Price have been disclosed below.
The Bidders can refer to the below-mentioned Key Performance Indicators, being a combination of financial and
operational Key Performance Indicators, to make an assessment of our Company’s performances and make an
informed decision.
A list of our Key Performance Indicators for 3 month ended June 30, 2025 and the financial years ended March
31, 2025, March 31, 2024 and March 31, 2023 is set out below:
* Not annualised for the three months ended June 30, 2025.
(1) Revenue from operations of the Company for respective fiscal / period
(2) Profit before exceptional items and tax (after profit/loss of associate + finance cost (excl. interest on lease liabilities) +
Depreciation + impairment loss (if any) – other income
(3) Profit before exceptional items and tax (after profit/loss of associate) + finance cost (excl. interest on lease liabilities) +
Depreciation + Impairment Loss (if any) – other income / Revenue from Operations *100
(4) Profit / (loss) for the year / period
(5) PAT / Revenue from Operations * 100
(6) PAT / Average Shareholders’ Equity
(7) Profit before exceptional items and tax (after profit/loss of associate) + Finance costs (excl. interest on lease liabilities) /
Capital Employed (Net Debt* + Net Worth)
*Net debt = non-current borrowings + current borrowings - cash & cash equivalents - bank balances other than cash.
(8) Net Debt* / Total Equity
* Net debt = non-current borrowings + current borrowings - cash & cash equivalents - bank balances other than cash.
(9) Number of countries wherein the Company has sold its products / services during the fiscal/ period
(10) Revenue from operations derived from the export of the products / services divided by the Revenue from operation * 100
(11) Number of Customers to whom the Company has sold its products during the fiscal / period
(12) Revenue derived from our top 10 customers from sale of products / services during the fiscal / period.
Explanation for the Key Performance Indicators metrics
The list of our Key Performance Indicators along with brief explanation of the relevance of the Key Performance
Indicators for the business operations of our Company is set out below:
Page 194
- 8. Set forth below are the details of comparison of key performance of indicators with our listed industry peers:
As of and for 3 months ended June 30, 2025
Fiscal 2025
Page 196
Fiscal 2023
Notes:
* Data or information regarding the peers is not available.
(1) Revenue from operations of the Company for respective fiscal / period
(2) Profit before exceptional items and tax (after profit/loss of associate + finance cost (excl. interest on lease liabilities) + Depreciation + impairment loss (if any) – other income
(3)Profit before exceptional items and tax (after profit/loss of associate) + finance cost (excl. interest on lease liabilities) + Depreciation + Impairment Loss (if any) – other income / Revenue from
Operations *100
(4) Profit / (loss) for the year / period
(5) PAT / Revenue from Operations * 100
(6) PAT / Average Shareholders’ Equity, (not annualised for the three months ended June 30, 2025).
(7) Profit before exceptional items and tax (after profit/loss of associate) + Finance costs (excl. interest on lease liabilities) / Capital Employed (Net Debt* + Net Worth)
*Net debt = non-current borrowings + current borrowings - cash & cash equivalents - bank balances other than cash.
(8) Net Debt* / Total Equity
* Net debt = non-current borrowings + current borrowings - cash & cash equivalents - bank balances other than cash.
(9) Number of countries wherein the Company has sold its products / services during the fiscal/ period
(10) Revenue from operations derived from the export of the products / services divided by the Revenue from operation * 100
(11) Number of Customers to whom the Company has sold its products during the fiscal / period
(12) Revenue derived from the our top 10 customers from sale of products / services during the fiscal / period.
INDUSTRY OVERVIEW
Unless otherwise indicated, the industry and market data used in this section has been obtained from the report
titled ‘Industry Report on Specialty Chemicals Sector’ prepared and issued by CARE, appointed by us pursuant
to engagement letter dated December 30, 2024, and exclusively commissioned and paid for by us in connection
with the Offer has been reproduced in full. No material information has been left out while extracting the CARE
Report. Unless otherwise indicated, all financial, operations, industry and other related information derived from
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Chart 11: Global Chemicals Industry Market Size
Source: CEFIC, CareEdge Research & Analysis, P: Projected; CY- Calendar Year
2.2 Market Segmentation of the Chemicals Industry
The chemical industry is broadly segmented into four key categories: Basic Chemicals, Specialty Chemicals,
Agricultural Chemicals, and Consumer Chemicals.
- 1. Basic Chemicals: These form the foundation of the chemical industry, holding the largest market share. In
2024, they are accounted for 56% share of the market, projected to slightly decline to 53–55% market share
by 2029.
- 2. Specialty Chemicals: Known for their tailored applications, this segment represented 20% of the market
share in 2024, with growth expected to reach 21–23% market share by 2029, reflecting rising demand for
customized and high-performance solutions.
- 3. Agricultural Chemicals: This segment includes fertilizers and pesticides essential for agriculture with a share
of 11% in 2024, with a slight decrease to 10–12% market share by 2029, as sustainable farming practices gain
prominence.
- 4. Consumer Chemicals: These include products like detergents, cosmetics, and household cleaning agents.
Their share is accounted for 13% in 2024 and is expected to grow modestly to 12–14% market share by 2029.
Chart 12: Market Segmentation of Chemicals Industry
Source: CareEdge Research & Analysis; % denote market share
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2.3 India’s rank in the global chemicals industry
The top 10 exporters in the global chemicals industry collectively contributed $2,479 billion in 2024, of the world's
total chemical exports. This highlights the concentrated nature of the market, with key players like the EU, USA,
and China dominating the space Over the years, India has enhanced its share in global chemical exports, reflecting
its growing manufacturing capabilities and competitive edge in chemicals space.
Chart 13: Chemical Exports Scenario
Source: World Trade Organisation (WTO) Statistical Review, CareEdge Research
The top importers in the global chemicals industry collectively accounted for $2180 billion in 2024, of the world's
total chemical imports. This underscores the concentrated nature of demand, with major players like the EU, USA,
and China driving global imports. Over time, India has steadily increased its share in global chemical imports,
highlighting its expanding domestic market, growing industrial base, and rising demand for specialty and bulk
chemicals.
Chart 14: Chemical Imports Scenario
Source: World Trade Organisation (WTO) Statistical Review, CareEdge Research
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2.4 Key growth drivers for the Chemical Industry
The growth drivers for the Chemical Industry are as follows:
- 1. Rising Demand from End-Use Industries:
- - o Robust growth in sectors like agriculture, paint, coatings, pharmaceuticals, construction, electronics,
and lubricants fuels demand for various chemicals.
- - o Increased focus on lightweight materials and energy-efficient solutions boosts the need for advanced
and specialty chemicals.
- 2. Technological Advancements:
- - o Innovations in process optimization, such as catalysis and biotechnological processes, enhance
efficiency and reduce costs.
- - o Adoption of Industry 4.0 and digitalization in manufacturing processes streamlines production and
improves quality.
- 3. Industrialization in Emerging Economies:
- - o Rapid industrial growth in markets like India, China, and Southeast Asia drives demand for
chemicals in manufacturing and infrastructure projects.
- - o Low production costs and government support for chemical manufacturing attract investments.
- 4. Innovation in Specialty Chemicals:
- - o Growth in sectors like personal care, healthcare, and electronics increases the demand for high-value
specialty chemicals.
- - o R&D investments support the development of custom formulations and niche products.
2.5 Specialty Chemicals
2.5.1 Global Specialty Chemicals
Overview and market size
Specialty chemicals are specifically produced or formulated substances designed for functions and applications.
Unlike commodity chemicals, which are mass-produced, specialty chemicals are manufactured in smaller
quantities, with a strong emphasis on quality, performance, and customization to meet the unique demands of
various industries. The quality of these chemicals is crucial, as it directly impacts the performance and safety of
the end products.
The global specialty chemicals was valued at $1,190 billion in 2024. The continued growth support from the
downstream industries is expected to support the growth trajectory for the global market. Furthermore, the
specialty market is expected to grow at CAGR of 8% reaching $1,748 billion until 2029.
Chart 15: Global Specialty Chemicals Market Size
Source: CareEdge Research & Analysis; P: Projected; CY- Calendar Year
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remains on a robust growth trajectory, with planned capital outlays aimed at enhancing production efficiency and
meeting increasing demand from end-user industries.
Capex Trend
Initially, investments remained moderate as the industry catered largely to domestic demand. However, a turning
point came around 2017–2018 with China's clampdown on polluting chemical units, triggering a global supply
rebalancing. This created a strong export opportunity for Indian players, who began investing aggressively to build
scale and diversify product offerings. Capital expenditure surged by nearly 70% between FY18 and FY20, peaking
just before the pandemic.
Though FY21 saw a temporary slowdown due to COVID-19-related disruptions, the sector rebounded quickly as
global clients sought more reliable and diversified sources beyond China. From FY2023 onwards, the industry
has entered a renewed investment cycle, with over Rs 16,000 crore in planned Capex through FY2026.
Higher capital investments by oil refiners in downstream petrochemicals are expected to boost the domestic supply
of raw materials for Indian chemical manufacturers, thereby lowering reliance on imports. Additionally, the push
for green chemistry and sustainable manufacturing is influencing investment in cleaner production technologies.
While the sector faces challenges such as inflationary pressures and global supply chain disruptions, the
investments are expected to support long-term growth, strengthen India's role in the global specialty chemicals
market, and reduce reliance on Chinese imports.
Source: Secondary Sources, CareEdge Research
Key Entry Barriers to the Industry:
The specialty chemicals sector is characterized by several strong entry barriers that limit the entry of new players:
- • Customer Registration & Qualification: A critical barrier is the requirement to be registered and approved
by customers before any supply can commence. The approval cycle, which typically takes 1–4 years, involves
extensive testing of product purities and impurities, customization to customer-specific needs, performance
validation, shelf-life studies, and end-use application testing. This creates significant stickiness for existing
suppliers and makes it difficult for new entrants to displace them.
- • High Product Development Costs: Developing new specialty chemical products demands substantial
investment in R&D, pilot-scale testing, and process optimization. The complex chemistry involved, along
with the need for precision in product performance, increases both the cost and time-to-market.
- • Regulatory & Compliance Requirements: Players must comply with stringent international and domestic
regulations such as REACH, EPA, FDA, BIS, and various environmental norms. Achieving and maintaining
certifications requires continuous investment in safety, sustainability, and compliance infrastructure.
- • Capital Intensity & Technology: Specialty chemical manufacturing facilities are capital-intensive, requiring
specialized equipment and technologies. The long gestation period before commercial viability acts as a
deterrent for new entrants.
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- 3. Global and Indian Performance Chemical Industry
3.1 Global Performance of Performance Chemical Industry
3.1.1 Overview of the Global Performance Chemical Industry
The performance chemicals industry has shown steady growth over the years, driven by increasing demand from
key sectors such as pharmaceuticals, agrochemicals, and automotive. After a slight dip in 2020, the industry
recovered, reflecting resilience and sustained demand. The market is projected to expand at a CAGR of 4.5%,
reaching USD 149 billion by 2029. This growth is supported by advancements in specialty formulations, rising
industrial applications, and stricter regulatory requirements that emphasise high-performance and sustainable
solutions.
Chart 20: Global Performance Chemical Industry Market Size
Source: Mordor, CareEdge Research; Years refer to Calendar Year
The global performance chemical market has demonstrated resilience and growth from 2019 to 2029, with
fluctuations driven primarily by the impact of the COVID-19 pandemic in 2020. After a decline in 2020 to USD
52 billion due to the COVID-19 pandemic, the market quickly recovered, reaching USD 64 billion in 2021 and
USD 81 billion in 2022 as demand rebounded. This recovery was largely fuelled by the resumption of industrial
activities and increased consumer demand for various chemical products as economies reopened.
Growth continued in 2024, with a value of USD 107 billion, as the global economy further stabilized driven by
the continued recovery and expansion in key sectors, including automotive, construction, and electronics.
The market is expected to maintain a strong upward trajectory, reaching a forecasted value of USD 149 billion by
2029, driven by rising demand in emerging markets, technological innovations, and a shift toward more eco-
friendly and energy-efficient chemical production processes. This includes the adoption of green chemistry
principles, which promote sustainable manufacturing techniques like the use of renewable feedstocks and the
reduction of hazardous by-products, ultimately leading to cleaner, more efficient production methods.
3.1.2 Key growth factors for the global chemical industry include:
- • Demand in Emerging Markets: Rapid industrialization and urbanization in regions like Asia-Pacific, Africa,
and Latin America are driving increased demand for chemicals. In road construction, chemicals like cement,
coatings, and plastics are needed for expanding infrastructure. Agriculture requires more fertilizers and
pesticides to support growing populations, while the consumer goods sector demands chemicals for products
like personal care, textiles, and packaging. Additionally, the development of the automotive industry is
boosting the consumption of lubricants and other performance chemicals, supporting smoother operations and
efficiency. These trends are fuelled by population growth and rising living standards.
- • Technological Advancements: The growing tech demand for solar energy and electric vehicles is driving
the need for chemicals like silicon for solar panels and lithium for EV batteries. These materials are essential
for advancing renewable energy and sustainable transportation solutions. The chemical industry supports the
-
-
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In 2024, Asia-Pacific led the global chemical market, accounting for 62% to reaching 64% by 2029, driven by
rapid industrialization and high demand across various sectors. North America follows with 17%, supported by
advanced technology and sustainable manufacturing. Europe holds 13% billion, driven by innovation and
environmental trends.
3.1.6 India’s Positioning in the global performance chemical industry
India's chemical industry holds a prominent position globally, ranking 6th in production and 14th in exports.
Specialty chemicals, particularly agrochemicals, dyes, and pigments, represent more than half of India's chemical
exports. In recent years, imports in the sector have grown consistently, with petrochemical intermediates making
up over 30% of total imports.
The Indian chemicals industry is expected to maintain a relatively stable segmentation mix between 2024 and
2029, though with some marginal shifts. Basic chemicals, which form the foundation of the industry and include
bulk products like petrochemicals, inorganic chemicals, and intermediates, will continue to dominate the market,
albeit with a slight decline from 56% in 2024E to 54% in 2029P. This indicates a gradual diversification of the
industry away from commoditized segments. Specialty chemicals, known for their higher value addition and end-
use specificity, are projected to grow modestly from 20% in 2024 to 22% in 2025(P), reflecting increasing demand
from industries like automotive, construction, and personal care. Meanwhile, agricultural chemicals, which
include fertilizers and crop protection products, are expected to remain stable at 11%, indicating a mature and
steady market. Consumer chemicals, comprising products like detergents, cleaning agents, and personal care
formulations, are also projected to hold steady at 13% in 2029(P), supported by consistent urban and rural demand.
Overall, the industry is moving toward a slightly more value-added profile, with specialty chemicals gaining a
larger share.
The chemical industry is a key sector in India’s economy, accounting for roughly 6% of the country’s GDP andemploying over 5 million people. While India is the second-largest global exporter of chemical dyes and
agrochemicals, contributing around 3% to global chemical sales, it still faces a dependency on imports. The
country relies on imported petrochemical intermediates for about 45% of its needs. Reducing this import reliance
through enhanced domestic production remains a strategic goal.
3.2 Domestic Performance Chemical Industry
Over the past two decades, Asia has driven much of the sector’s growth, accounting for half of global chemical
sales. India’s chemical industry is highly diverse, encompassing the production of nearly 80,000 commercialproducts across categories such as Bulk chemicals, Specialty chemicals, Agrochemicals, Petrochemicals,
Polymers, and Fertilizers.
As India aims to become the third-largest global economy by 2030, its chemical sector is set to play a pivotal rolein supporting diverse industries and meeting the demands of its growing economy. The vision for India’s chemicaland petrochemical industries is to become a sustainable global manufacturing hub by prioritizing sustainable
manufacturing practices and the circular economy.
India's chemicals market is growing due to rising domestic consumption and demand from key sectors like
packaging, personal care, and automotive. The expansion of e-commerce has boosted demand for packaging
materials, including plastics and biodegradable options. Government initiatives like Make in India and
Atmanirbhar Bharat are further driving growth by simplifying regulations and attracting investment. Additionally,
improved infrastructure, including chemical parks and transport networks, supports efficient distribution of
chemicals both locally and globally.
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Chart 25: Indian Performance Chemical Industry Market Size
Source: Mordor, CareEdge Research
The chemical industry has shown steady growth, with its total value rising from Rs 141.1 billion in FY19 to Rs
448.4 billion in FY29. This growth is largely driven by the increasing demand for chemicals across key sectors
like manufacturing, agriculture, healthcare, and energy. As these industries continue to expand, the demand for
chemicals rises, fuelling overall market growth.
From FY19 to FY25, the chemical industry has grown, fuelled by technological innovations and sustainability
investments. Key advancements like automation, AI, green chemistry, IoT, data analytics, biotechnology, and
smart manufacturing drove this progress. Advancements in production methods, materials, and eco-friendly
technologies have enhanced efficiency and the ability to meet consumer demand for more sustainable products.
Furthermore, rapid industrialization in emerging markets, especially in Asia, is driving significant demand for
chemical products, further contributing to the sector's growth. Enhanced supply chain efficiency and expanded
production capacities also play a critical role in supporting this growth, ensuring the chemical industry remains
on a positive trajectory.
3.2.1 Key Growth Factors
