About Indian Phosphate Limited

Indian Phosphate is mainly engaged in the production of Linear Alkylbenzene Sulphonic Acid LABSA 90%, popularly known as LABSA, is an anionic surfactant and it is used in the formulation of all types of detergent powders, cakes, toilet cleaners and liquid detergents. They are also engaged in the manufacturing of “Single Super Phosphate” (SSP) fertilizer and “Granules Single Super Phosphate” (GSSP) Fertilizer which is manufactured and supplied as per the standards of Fertilizer Control Order of India in powder and granulated form as well as fortified with zinc and boron. Single Super Phosphate and Granules Single Super Phosphate are being a fertilizer in nature used in agriculture industry. The company operates from its manufacturing facility located at Umarda, Girwa district, Udaipur, Rajasthan which is in the close proximity of supply of both the raw materials (a) Sulphuric Acid 98% (b) Rock Phosphate used in manufacturing of our products. The other major raw material Linear Alkylbenzene (LAB) is sourced from IOCL, Vadodara, Nirma Ltd., Vadodara and Reliance Industries Ltd., Patalganga.

IPL, a company specializing in manufacturing and supplying Single Super Phosphate (SSP) fertilizer, began its journey by trading dolomite and limestone. The company furthermore also produces Zincated Single Super Phosphate - "Powder/Granules" and Zincated and boronated Single Super Phosphate - "Granules" by formulating zinc and boron into the granulator and powder hopper along with Single Super Phosphate powder in required proportion. Since last 5 years their focus is to produce fortified SSP with Zinc and Boron. They have educated farmers over the past five years, encouraging them to use fortified SSP with boron and zinc according to soil deficiencies. As a result, they are currently generating more than 80% of SSP as fortified SSP. The Company has a presence in the major states like, Punjab, Bihar, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, Himachal Pradesh, West Bengal and Uttarakhand.

The company, with a view to increasing its business presence in South Indian Markets and also as a part of business strategy we are setting up manufacturing plant of Sulphuric Acid which is backward integration plant for manufacturing of LABSA 90%. The Company, has acquired a Plot admeasuring area of 8.25 acres on lease basis at SIPCOT Industrial Park, Cuddalore District, Tamilnadu for Sulphuric acid with installed capacity of 200 MT/ day including manufacturing of LABSA 90% with installed capacity of 100 MT/ day & Magnesium Sulphate with installed capacity of 60 MT/day.

Government of India has announced freight subsidy on SSP effective from 1st July, 2024 in order to ensure availability of SSP in the distant states. The freight subsidy is in addition to the product subsidy. This will enable the company to reach out to remote states like West Bengal, Bihar, Chhattisgarh and northern areas of Uttar Pradesh at the competitive prices. The freight subsidy given by government will increase the Net Sales Revenue of the company as earlier it was borne by the company. They derive their revenue from following two business verticals: 
a) LABSA 90% (Chemical) 
b) Single Super Phosphate (Fertilizer)

CHEMICAL INDUSTRY
Covering more than 80,000 commercial products, India’s chemical industry is extremely diversified and can be broadly classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilisers. India is the 6th largest producer of chemicals in the world and 3rd in Asia, contributing 7% to India’s GDP. India's chemical sector, which is currently estimated to be worth US$ 220 billion in 2022 and is anticipated to grow to US$ 300 billion by 2025 and US$ 1 trillion by 2040.

Globally, India is the fourth-largest producer of agrochemicals after the United States, Japan and China. India accounts for 16-18% of the world production of dyestuffs and dye intermediates. As per Chemexcil (Chemicals Export Promotion Council), India’s agrochemicals export was estimated to be at US$ 1.04 billion from April 2023-June 2023 (Provisional). Indian colorants industry has emerged as a key player with a global market share of ~15%. The country’s chemicals industry is de-licensed, except for few hazardous chemicals. India has traditionally been a world leader in generics and biosimilars and a major Indian vaccine manufacturer, contributing more than 50% of the global vaccine supply. India holds a strong position in exports and imports of chemicals at a global level and ranks 14th in exports and 8th in imports at global level (excluding pharmaceuticals). From April 2023 to June 2023 (provisional), India's dye exports (Dyes and Dye Intermediates) totalled US$ 561.56 million.

The domestic chemicals sector's small and medium enterprises are expected to showcase 18-23% revenue growth in FY22, owing to an improvement in domestic demand and higher realisation due to high prices of chemicals. Domestic demand is expected to rise from US$ 170 billion-US$ 180 billion in 2021 to US$ 850 billion-US$ 1,000 billion by 2040. India’s proximity to the Middle East, the world’s source of petrochemicals feedstock, enables it to benefit.

The Indian chemicals industry stood at US$ 178 billion in 2019 and is expected to reach US$ 304 billion by 2025 registering a CAGR of 9.3%. The demand for chemicals is expected to expand by 9% per annum by 2025. The chemical industry is expected to contribute US$ 383 billion to India’s GDP by 2030. 

India has traditionally been a world leader in generics and biosimilars and major Indian vaccine manufacturers, contributing more than 50% of the global vaccine supply. Chemicals and petrochemicals demand in India is expected to nearly triple and reach US$ 1 trillion by 2040. 

An investment of Rs. 8 lakh crore (US$ 107.38 billion) is estimated in the Indian chemicals and petrochemicals sector by 2025. The specialty chemicals constitute 22% of the total chemicals and petrochemicals market in India. The demand for specialty chemicals is expected to rise at a 12% CAGR in 2019-22. 

The Department of Chemicals & Petrochemicals intend to bring PLI in chemical & petrochemical sector and will redraft the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) guidelines.

Indian manufacturers have recorded a CAGR of 11% in revenue between FY15 and FY21, increasing India’s share in the global specialty chemicals market to 4% from 3%, according to the Crisil report. A revival in domestic demand and robust exports will spur a 50% YoY increase in the CAPEX of specialty chemicals manufacturers in FY22 to Rs. 6,000- 6,200 crore (US$ 815-842 million). Revenue growth is likely to be 19-20% YoY in FY22, up from 9-10% in FY21, driven by recovery in domestic demand and higher realisations owing to rising crude oil prices and better exports. 

Moreover, according to the CRISIL report, the specialty chemicals market in India would grow faster than China, increasing its market share to 6% by 2026 from 3-4% in fiscal 2021. A shift in the global supply chain brought on by the China+1 strategy and a resurgence in domestic end-user demand will fuel significant revenue growth of 18–20% in 2022 and 14–15% in 2023. 

Moreover, according to the CRISIL report, the specialty chemicals market in India would grow faster than China, increasing its market share to 6% by 2026 from 3-4% in fiscal 2021. A shift in the global supply chain brought on by the China+1 strategy and a resurgence in domestic end-user demand will fuel significant revenue growth of 18–20% in 2022 and 14–15% in 2023.

Despite the current pandemic situation, the Indian chemical industry has numerous opportunities considering the supply chain disruption in China and trade conflict among the US, Europe and China. Anti-pollution measures in China will also create opportunities for the Indian chemical industry in specific segments. 

Additional support, in terms of fiscal incentives, such as tax breaks and special incentives through PCPIRs or SEZs to encourage downstream units will enhance production and development of the industry. The dedicated integrated manufacturing hubs under Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) policy to attract an investment of Rs. 20 lakh crore (US$ 276.46 billion) by 2035. 

To bring about structural changes in the working of domestic chemical industry, future investments should not only focus on transportation of fuels such as petrol and diesel, but also on crude-to-chemicals complexes or refineries set up to cater to the production of chemicals.

INDIAN PHOSPHATE LIMITED STRENGTHS
1. Cost Effective sourcing and Strategic Location of Manufacturing Unit
2. Quality assurance
3. Leveraging the expertise of their Promoters and Management Team

INDIAN PHOSPHATE LIMITED STRATEGIES
1. Optimal Utilization of Resources
2. Backward integration and Diversification
3. To build-up a professional team for future expansion coming up in the next five years
4. Broaden and Deepen their Geographical Presence

INDIAN PHOSPHATE LIMITED RISK FACTORS & CONCERNS
1. They have extended Corporate Guarantee on behalf of one of their Group Companies.
2. The Company is dependent on few numbers of customers for sales.
3. Out of total cost of Plant & Machinery worth ₹ 2817.40 lakhs, they have not yet placed order for any of such Plant & Machinery.
4. One of the business verticals of their business is Fertiliser & the same is dependent on the performance of the agricultural sector in which their fertilizers are used.
5. They may not be successful in implementing their growth strategies, particularly in setting up of a new manufacturing unit to expand its current production capabilities as well as expanding their current product portfolio including, Sulphuric Acid, Linear Alkyl Benzene Sulphonic Acid (LABSA) and Magnesium Sulphate
6. Presently, they have only manufacturing facility in Umarda in Udaipur and any shutdown or slowdown there can affect their business.
7. Resistance from farmers to crop protection chemicals and the inappropriate application of their products from farmers may adversely affect their business, financial condition and results of operations.