| Anupam Rasayan India Limited | ||||||
| Ratings placed on 'Watch Negative' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has placed its ratings on the bank facilities of Anupam Rasayan India Ltd (ARIL; part of the Anupam Rasayan group) on ‘Rating Watch with Negative Implications'.
The negative watch follows the announcement by ARIL to acquire 100% equity in Jayhawk Fine Chemicals LLC, a US-based specialty chemicals company, for a total consideration of $150 million, which may be funded through a mix of debt, equity or internal accrual. The capital allocation to fund this acquisition will remain critical as the operations of ARIL remain highly working capital intensive, resulting in high bank limit utilisation of more than 90% as of September 2025. Although ARIL is looking for mix of debt and equity funding for the current acquisition, any further stretch in liquidity may deteriorate the overall credit profile. Crisil Ratings will continue to stay in touch with the management and resolve the watch once it obtains clarity on the funding of the acquisition and the intensity of working capital requirement.
The business risk profile remains stable, with improvement in the agro segment in the first half of fiscal 2026, which led to an increase in revenue to Rs 1,217 crore from Rs 548 crore in the same period last fiscal. However, the operating margin declined to 21.3% from 27.67% due to limited ability to pass on higher cost. Working capital cycle remains stretched, with gross current assets (GCAs) of around 646 days as of March 2025 (530 days previous fiscal) because of high inventory and receivables levels of more than 500 days and 190 days, respectively.
The ratings continue to reflect the Anupam Rasayan group’s strong business risk profile, backed by established market position and diversified revenue streams; and strong financial risk profile. These strengths are partially offset by large working capital requirement, modest operating efficiency and susceptibility of operating margin to volatility in raw material prices and foreign exchange (forex) rates. |
Analytical approach Crisil Ratings has consolidated the business and financial risk profiles of ARIL with its wholly owned subsidiaries, Jainam Intermediates Pvt Ltd, ARIL Transmodal Logistic Pvt Ltd, ARIL Fluorospeciality Pvt Ltd, Anupam Japan GK, and Anupam Europe AG Anupam USA LLC; and the subsidiary, Tanfac Industries Ltd (Tanfac), over which ARIL exercises effective control. These entities are together referred to as the Anupam Rasayan group.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Strong business risk profile, backed by established market position and healthy operating efficiency: The group has a strong market position in custom synthesis and manufacturing of specialty chemicals because of integrated operations and a robust clientele. With nearly four decades of experience, the company has built a healthy reputation for its expertise in complex multi-step synthesis and innovative manufacturing processes. The group caters to globally relevant chemical and agrochemical companies, including 31 multinational companies and cumulative 75 clients. Customer-centric solutions has positioned ARIL as a preferred partner for clients across various industries, including agrochemicals, personal care, pharmaceuticals, and other specialty segments (polymers and electronic chemicals). Further expansion into high-value fluorination chemistry products and polymer applications is expected to strengthen market position.
Diversified revenue streams and backward integration: Combined revenue from the pharma and polymer segments is expected to exceed 30% of total revenue in fiscal 2026. These segments are positioned as growth drivers, reducing dependency on agrochemicals. The company has already started commercialising new molecules launched in fiscal 2024 and the first half of fiscal 2025, and is focusing on growing contributions from Japanese customers in the fluoropolymer segment and In the polymer segment, new product introductions targeting the US market and applications in engineering fluids and polymers
The company has also acquired Tanfac, which is a leading producer of hydrogen fluoride and potassium fluoride in India. These materials are critical inputs for producing fluorinated molecules used in pharma, polymers, and agrochemicals. By acquiring Tanfac, ARIL secures an uninterrupted supply of these raw materials.
Strong financial risk profile: The capital structure is likely to remain supported by continuous reduction in debt and absence of large, debt-funded capital expenditure (capex). The group’s dependence on debt is expected to reduce over the medium term. Networth and total outside liabilities to adjusted networth (TOLANW) ratio were healthy at Rs 2,935.6 crore and 0.74 time, respectively, as on March 31, 2025, and Rs 3,197.3 crore and 0.6 time, respectively, as on September 30, 2025. Over the medium term, the TOLANW ratio is likely to remain below 0.70 time.
Debt protection metrics were robust on account of strong operating profitability. The financial risk profile is expected to remain strong over the medium term with healthy accretion to reserve and no debt-funded capex. |
Key Rating Drivers - Weaknesses Large working capital requirement: The GCAs were high at around 646 days as on March 31, 2025 (530 days previous fiscal), due to large inventory and stretched receivables of more than 500 days and 190 days, respectively. Inventory was higher at year-end as it comprised of new and existing products to ensure timely and smooth supply to customers. However, this is expected to improve over the medium term and will remain monitorable.
Susceptibility to volatility in forex rates, economic downturns, and intense competition from global players: The company derives over 50% of revenue from exports to Europe, North America, and other regions, and imports 15-20% of its requirement; thus benefiting from a partial hedge. Though open positions are hedged through forward contracts, operations remain susceptible to sharp changes in forex rates. Any economic downturn impacting demand poses an additional challenge. |
Liquidity Strong Liquidity is supported by net cash accrual of Rs 280-350 crore against nil debt obligation in fiscal 2026. Bank limit utilisation was 92% for the 9 months through September 2025. Cash and equivalent stood at more than Rs 413 crore as on September 30, 2025, following the improvement in revenue in the first half of fiscal 2026. Although the company does not have any debt obligation, increase in working capital limit of Rs 100 crore (of which Rs 25 crore is yet to be disbursed), unencumbered cash balance of Rs 413 crore, and no major capex plan support the liquidity. Tanfac has been debt-free since the past three fiscals and has no working capital limit. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the company ARIL, incorporated in 1977, is promoted by Mr Anand Desai. The company manufactures specialty chemicals used in the crop protection, pharmaceutical, polymer, pigment, and biocide industries. Its manufacturing units are in Sachin and Jhagadia in Gujarat. The company has ISO 9001-2015, ISO 45001-2018 and ISO 14001-2015 certifications for quality, occupational health and safety and environmental management systems, respectively. ARIL is listed on the Bombay Stock Exchange and the National Stock Exchange. The company acquired 25.79% share in Tanfac as on May 20, 2022. During fiscal 2025, Tanfac registered revenue of Rs 557 crore and Ebitda (earnings before interest, taxes, depreciation, and amortisation) of Rs 131 crore. |
Key financial indicators
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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