About Arunaya Organics Limited

Business Overview

Established in 2010, Arunaya Organics operates in the dye industry, engaging in both trading and manufacturing of a wide variety of dyes and dye intermediates. A major portion of revenue is derived from outsourced manufacturing to group company Chinmay Chemicals Private Limited.

The company offers a comprehensive product portfolio, including reactive, acid, direct, basic, and solvent dyes, along with dye intermediates. These are available in various forms such as spray-dried and tray-dried powders, granules, crude, reverse osmosis-treated, and salt-free products. Additionally, specialty performance chemicals are supplied for the paper and textile dyeing industries, serving both domestic and international markets.

The manufacturing facility, located at C-8, GIDC Estate, Naroda, Ahmedabad-382330, Gujarat, India, operates with an installed capacity of 30 metric tons per annum. The production process includes Material Procurement, Material Inspection, Inputting, Synthesis, Process Inspection, Drying, Blending, Final Inspection, Packaging, Storage, and Delivery.

Strategically positioned near Mundra Port and ICD Ahmedabad, the facility benefits from efficient logistics, ensuring smooth distribution, raw material procurement, and customer access. As of February 28, 2025, the Company employed about 18 workmen and 12 employees across the production unit, in total 30 employees. The Banker to the Company is Indian Overseas Bank.

Industry Analysis

Dye and Chemical Industry in India – An Overview

India is a global leader in dye manufacturing, accounting for approximately 16–18% of global dyestuff exports. Indian dyes are exported to over 90 countries, highlighting the country’s strong international footprint.

Trade Statistics (April–September 2023-24, Provisional)

• Exports:

  • Agrochemicals: US$ 1.70 billion

  • Dyes: US$ 867 million

  • Dye Intermediates: US$ 62 million

• Imports:

  • Agrochemicals: US$ 738 million

  • Dyes: US$ 120 million

  • Dye Intermediates: US$ 522 million

India ranks 9th globally in chemical exports and 6th in imports (excluding pharmaceuticals), underscoring its significance in international chemical trade.

Sectoral Performance and Growth

India is among the top exporters of chemicals worldwide, with products ranging from organic and inorganic chemicals, tanning and dyes, agrochemicals, plastics, synthetic rubber, and filaments. In FY23, the total exports of major chemical and petrochemical products stood at US$ 23.8 billion. This growth has been supported by:

• Department of Commerce and Industry

• Indian exporters and CHEMEXCIL (Chemical Export Promotion Council)

• Market access initiatives, global B2B events, and product-specific marketing efforts

Despite challenges like high freight costs and container shortages, SMEs from Gujarat, Maharashtra, Karnataka, Tamil Nadu, and Andhra Pradesh have notably benefited from export opportunities.

In FY24 (up to August 2023), chemical and petrochemical exports stood at US$ 8.4 billion. In FY22, chemical product exports reached US$ 24.31 billion, marking a 38.67% YoY growth.

Export Destinations and Trends

India exports to over 175 countries, with major destinations including:

• USA – Largest importer (US$ 3.85 billion in 2022-23, +8% YoY)

• Brazil – US$ 1.82 billion (+6% YoY)

• China – US$ 1.74 billion (−31% YoY)

Other key export markets include the Netherlands, Saudi Arabia, Indonesia, UAE, Japan, and Germany, along with emerging destinations like Turkey, Russia, Hong Kong, Korea RP, Taiwan, and Mongolia.

• China primarily imports dye intermediates and castor oils

• USA leads in imports of dyes, agrochemicals, inorganic/organic chemicals, and essential oils

Market Size and Production Insights

• The Indian chemical and petrochemical sector is valued at US$ 215 billion, projected to grow to US$ 300 billion by 2025.

• In 2021-22, chemical exports (excluding pharma and fertilizers) contributed 11.7% of India’s total exports; 10.8% contribution recorded up to Sept 2022.

• Export CAGR (2017–22) for chemicals (excluding pharma & fertilizers): 13.86%, higher than the national export CAGR of 12.62%.

• WPI-based CAGR for manufactured goods and chemicals during the same period: 4.4%.

Production Metrics (2023-24, up to August)

• Major Chemicals: 53.54 lakh tonnes (↓ from 54.32 lakh tonnes YoY)

• Petrochemicals (e.g., Synthetic Detergent Intermediates): 34.07 lakh tonnes

• Organic Chemicals: Production rose 4.52% YoY

Major Petrochemicals: Output increased 6.08% YoY

Business Strengths

➢ Experienced Leadership
Led by Promoter, Chairman, and Managing Director Vinod Agarwal, who brings over a decade of experience in the dye industry. Actively involved in operations, quality assurance, marketing, and finance. Recipient of the Business Icon’s Award by Divya Bhaskar and life member of the Association of Chemical Technologies (India).

➢ Diverse Product Portfolio
Offers a wide range of dyes, including Acid, Basic, Direct, Solvent, Intermediate, and Reactive Dyes, with multiple color options. Provides customized solutions to meet varied industrial needs and maintains a strong focus on market-driven product development.

➢ Strong R&D and Quality Control
Emphasizes Research & Development and Quality Control to drive new product development and ensure customer quality standards. Seamless coordination between R&D and QC enables scaling of lab-developed products to commercial levels while maintaining consistent quality.

➢ Robust Quality Assurance
Certified with ISO 9001:2015 for Quality Management and ISO 14001:2015 for Environmental Management, covering the manufacture, supply, and export of dyestuffs and intermediates, ensuring compliance with global quality and sustainability standards

Business Strategies

➢ Backward Integration for Cost Reduction
Plans are in place to manufacture key raw materials such as Amino C Acid, J ACID, Mixed Cleves Acid, and J Acid Urea in-house, aiming to reduce dependence on third-party suppliers and lower operational costs through backward integration.

➢ New Manufacturing Facility at Dahej
A new unit at Dahej, Gujarat, is proposed to produce organic, food, and cosmetic dyes. This move supports the transition from job work dependency (previously contributing up to 83% of revenue) to in-house manufacturing, enabling cost savings, capacity expansion, and long-term financial growth.

➢ Domestic and Global Market Expansion
Focus remains on expanding the customer base across India and international markets by entering new geographies, increasing product registrations, and enhancing market reach through direct sales or strategic partnerships.

➢ Enhancing Operational Efficiency
Aims to boost economies of scale, optimize supply chain costs, and improve inventory management, enabling delivery of high-quality products at competitive prices and strengthening the overall market position

Business Risk Factors and Concerns

1. Heavy Dependence on Group Company for Manufacturing
A substantial portion of revenue (over 90% as of Dec 2024) comes from job work by Chinmay Chemicals Pvt. Ltd., a group company. Any disruption in their operations or failure to meet quality standards may adversely affect business continuity and financial performance.

2. Geographic Concentration Risk in Gujarat
All current and planned manufacturing units are located in Gujarat. Any regional disruptions—natural disasters, civil unrest, or utility failures—could halt production and negatively impact operations and revenue.

3. Revenue Concentration in Limited Product Segments
Direct and Intermediate Dyes consistently contribute over 60% of operating revenue. Any decline in demand for these specific products may significantly affect profitability.

4. Industry Dependency and Economic Cyclicality
Revenue is closely tied to performance in end-user industries sensitive to global and domestic economic trends. A slowdown in these sectors may reduce product demand, affecting revenue and operational stability.

5. Regional Market Dependency
A major share of domestic revenue comes from India’s West Zone. Market disruptions, increased competition, regulatory changes, or health crises in this region could materially impact sales, profitability, and business strategy.

Arunaya Organics' operations are heavily dependent on a group company for manufacturing, concentrated in one geographical region, and rely on a narrow product segment. These factors, along with industry cyclicality and regional dependence, pose significant operational and financial risks.