Chemical Industry

Chemical Industry is one of the oldest industries in India, which contributes

significantly towards industrial and economic growth of the nation. It is highly
science based and provides valuable chemicals for various end products such as
textiles, paper, paints and varnishes, leather etc., which are required in almost all
walks of life. The Indian Chemical Industry forms the backbone of the industrial and
agricultural development of India and provides building blocks for downstream
industries.
Chemical Industry is an important constituent of the Indian economy. Its size is
estimated at around US$ 35 billion approx., which is equivalent to about 3% of India's
GDP. The total investment in Indian Chemical Sector is approx. US$ 60 billion and
total employment generated is about 1 million. The Indian Chemical sector accounts
for 13-14% of total exports and 8-9% of total imports of the country. In terms of
volume, it is 12th largest in the world and 3rd largest in Asia. Currently, per capita
consumption of products of chemical industry in India is about 1/10th of the world
average. Over the last decade, the Indian Chemical industry has evolved from being a
basic chemical producer to becoming an innovative industry.
The Indian Chemicals Industry comprises both small and large-scale units. The fiscal
concessions granted to small sector in mid-eighties led to establishment of large
number of units in the Small Scale Industries (SSI) sector. Currently, the Indian
Chemical industry is in the midst of a major restructuring and consolidation phase.
With the shift in emphasis on product innovation, branch building and environmental
friendliness, this industry is increasingly moving towards greater customer
orientation. Even though India enjoys an abundant supply of basic raw materials, it
will have to build upon technical services and marketing capabilities to face global
competition and increase its share of exports.
As the Indian economy was a protected economy till the early nineties, very little
large-scale R&D was undertaken by the Chemical industry to create intellectual
property. The Industry would, therefore, have to make large investments in R&D to
successfully counter competition from the international chemicals industry. India has
a number of scientific institutions and the countrys strength lies in its large pool of
highly trained scientific manpower.
India also produces a large number of fine and specialty chemicals, which have very
specific uses and are essential for increasing industrial production. These find wide
usage as food additives and pigments, polymer additives, anti-oxidants in the rubber
industry, etc.

Total companies in the chemical Drugs & Fertilizer industry.

Total companies Credit Rating
Listed on BSE Listed on NSE
Chemical 104
37
37
23
Drugs 18
13
13
Fertilizer 59
59
17
21

Unlisted
4
5
21

Table showing the companies listed on BSE ,NSE & the different credit rating
agencys.
Company
name
. Aarti
Industries Ltd
Alkyl Amines
Chemicals Ltd
Excel Industries
Ltd
Godrej
Industries Ltd
Gwalior
Chemical
Industries Ltd
Hikal Ltd
Navin Fluorine
International
Limited
Pidilite
Industries Ltd
Punjab
Chemicals &
Crop Protection
Ltd

BSE

NSE

CRISIL

ICRA

CARE

FITCH
india

Citurgia
Biochemicals
Ltd
Dujodwala
Products Ltd
Elantas Beck
India Ltd
J F Laboratories
Ltd
Resonance
Specialities Ltd

Andhra
Petrochemicals
Ltd
Ganesh

Benzoplast Ltd
Ciba India Ltd
Clariant
Chemicals
(India) Ltd
Jayant Agro
Organics Ltd
NOCIL Ltd
Akzo Nobel
Chemicals Ltd
Avon Organics
Ltd
Gulshan
Polyols Ltd

--

The above table tries to give a broad picture of the different companies listed
in BSE AND NSE. It shows that all most all companies are rated on BSE
while none of them are rated on NSE.
Gulshan Polyols Ltd ,Alkyl Amines Chemicals Ltd , Excel Industries Ltd
,Gwalior Chemical Industries Ltd, Navin Fluorine International Limited
,Pidilite Industries Ltd ,Punjab Chemicals & Crop Protection Ltd ,Citurgia Bio
chemicals Ltd ,Dujodwala Products Ltd ,Elantas Beck India Ltd ,Resonance
Specialities Ltd ,Ganesh Benzoplast Ltd ,Ciba India Ltd , Clariant Chemicals
(India) Ltd , Jayant Agro Organics Ltd ,NOCIL Ltd , Akzo Nobel Chemicals
Ltd ,Avon Organics Ltd ,Aarti Industries Ltd have gone for rating their
instruments with CRISIL credit rating agency.

Godrej Industries Ltd, Hikal Ltd, Andhra Petrochemicals Ltd, J F Laboratories

Ltd have gone for rating their instruments with ICRA credit rating agency.

Gwalior Chemical Industries Ltd, Navin Fluorine International Limited,

Punjab Chemicals & Crop Protection Ltd, Gulshan Polyols Ltd, Avon
Organics Ltd have gone for rating their instruments with CARE credit rating
agency.

None of the companies from Chem-Org-Large, Chem-Org-Med/Sml, ChemPlasticizer, Chem-Pente/Forma, Chem-Splty-Large, Chem-Splty-M/Sml, have
gone for rating with FITCH India credit rating agency.

figure 1
List of all sectors in chemical industry
Chem-Org-Large , Chem-Org-Med/Sml, Chem-Plasticizer, ChemPente/Forma, Chem-Splty-Large, Chem-Splty-M/Sml.
Conclusion
From the above figure it depicts that commercial paper and long term debts
were the instruments that were highly issued. while forign currency were least issued
from the year 1997-2009

figure 2
The above figure depicts the total number of instruments issued and the
amount raised against them.
As we can see from 1997-2009 the no of instruments issued is constantly
growing accept in the year 2000 were there was a slight decline
But the amount raised is comparatively lower then the amount raised
the figure depicts
that
that amount
the figure depicts that
amount raised is higher in
case of short term debts
ie. 4464.7 Rs crores.
while as the least mount
raised is by pass through
certificate.

figure 3
figure 4
Source data:
Capitailine

amount
raised is
higher by
chem-orglarge , the
least
amount
raised is
by chemorgmedium

total amount raised by chemical industry in

Rs.crores
8398.99

9000

8000

amount in crores

7000

6000

5000

4000

3000

2000

1080
1000

Series1

Chem-Org-Large

Chem-Org-Med/smal

Chemicals Pentaerythritol /
Formaldehyde

Chemicals - Plasticizers

Chemicals - Speciality Large

Chemicals - Speciality Medium / Small

8398.99

24.1

197

1080

217.61

commercial paper

ratingfor commercial paper year 1997-2009

stable
downgrade

20
no of instruments graded

217.61

197

24.1
0

15
10
5
0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

commercial paper 1

17

stable

17

downgrade

1
years

The above figure depicts that Most of commercial papers have Remained Stable
for the period 1997-2009
Source data:
Capitailine

figure 5

the figure depicts

that commercial paper has
been stable from 1998 till
2009 however in the year
1997 one of them was
downgraded and in the
year 1999 and 2008 again
one commercial paper
was downgraded.the
reason for downgrading in
these years was due to
weak financial position.

the figure
depicts that from the
year 1997 to 2003 fixed
deposits have remained
stable however In the
year 1998 & 2001, 1
fixed deposit was
downgraded.
in the year 2004-05,
2008-2009 no
instruments were raised.
the reason for
downgrade were due to
companies week
structure
figure 6

instruments more frequently raised by crisil from the year 1997-2009

figure 7
the above figure depicts that non connvertable debentures are frequently rated
by crisil rite from the year 1988 to 2009, whigle as fixed deposit and short term debts
are least frequently rated I the year 2006