Thread by @ViaWealthy

"Jubilant Ingrevia - understanding it's product applications " - thread

Note : We played demerger of jubilant life and clients received ingrevia shares.

wealthyvia.com/offerings/supe…

Ingrevia—a union of ‘Ingre’ denoting ingredients and ‘vie’ in French meaning life (i.e., ingredients for
life). Operating under three segments -- specialty chemicals, nutrition & health solutions and life
science chemicals

JIL offers more than 350 products to more than 1,400 customers globally.

These range from specialty chemicals, advanced stage complex chemistry solutions, nutraceuticals, straight nutritional ingredients like vitamin B3, pre-mix solutions for animal & human nutrition, pyridine & picolines and acetyl range of products.

The pyridine ring occurs in many important compounds, including agrochemicals, pharmaceuticals,
and vitamins. Pyridine is basically a chemical substance made from acetaldehyde, ammonia, and
formaldehyde mixed with a catalyst .

Pyridines are contained in many natural products, vitamins, coenzymes, and alkaloids. Pyridine moieties are often used in drugs and pesticides because
of characteristics that include basicity, water solubility, stability, hydrogen bond-forming ability, and
small molecular size.

Pyridine is used as a solvent and to make many different products such as medicines, vitamins, food
flavorings, pesticides, paints, dyes, rubber products, adhesives, and waterproofing for fabrics.

Pyridine derivatives have uses in 1. Anti-microbial 2. Anti-viral 3. Antioxidant 4. Anti-Diabetic 5. Anti Cancer Activities 6. Anti-Malarial Agents 7. Anti-Inflammatory Agents 8. Analgesic Potency 9. Psychopharmacological Antagonistic 10. Anti-Amoebic Agents 11. Iron Overload ...

e.g. conjugate of sulfapyridine and 5-aminosalicylic acid by an azo bond is the compound called
sulfasalazine . It displays good water solubility and is used in clinical practice in the treatment of
rheumatoid arthritis, ulcerative colitis, and Crohn’s disease.

Anti-Cancer Activities Metal complexes of Cu(II) with Schiff base 2-[N-(a-picolyl)-amino]-
benzophenone on pzridine particularly brominated products have highest cytotoxity and show
very good antitumor activity .

Compounds of pyrazoline, pyridine and pyrimidine coupled with
indole functionality were obtained in reasonable pure form and were found to have excellent
activity against tumor cells. 2-acetylpyridine derivative’s,

2-benzoxazolylhydrazon have anti-tumor
activity and if acetyl group is replace by acyl group then it have excellent inhibitor of leukemia, colon
and ovarian cancer cell line .

Palladium and zinc complexes of 2-acetyl pyridine thiosemicarbazone
have good anti-tumor activity against human cell with less cytotoxicity and are potential candidates
as anti-tumor agents for future.

Globally among top 2 manufacturers of Acetic Anhydride and Propionic Anhydride in merchant
market

Acetic Anhydride : Acetic Anhydride is a clear liquid with a pungent, penetrating vinegar-like odor.
The largest volume use for acetic anhydride is as a raw material for cellulose acetate fibers and
plastics. It is widely used as an acetylating agent or in chemical synthesis.

Acetic anhydride is also a
key raw material for aspirin, acetaminophen and other pharmaceuticals manufacturing. Fastest
growing applications for: Acetic Anhydride are wood acetylation, Pharmaceuticals & food and
nutrition; Ethyl Acetate are Flexible Packaging, Pharma and Inks.

Acetic anhydride is an irritant and combustible liquid. Because of its reactivity toward water and
alcohol, foam or carbon dioxide are preferred for fire suppression. The vapor of acetic anhydride is
harmful. So permissions and norms might be higher here.

Acetic Anhydride merchant market is
estimated to grow at CAGR of ~3.6% from 2020 to 2025, whereas no new capacity has been
announced.

European Union is the major deficit market: nearly 90% import dependent for Acetic Anhydride; nearly 70% import dependent for Ethyl Acetate Shift of manufacturing from China to India will encourage growth in various industrial applications in India.

Fuel Grade Ethanol:
Among leading suppliers of Fuel grade Ethanol to Oil Marketing Companies (OMCs), supporting India’s
Ethanol Blending Program (EBP) .

World’s largest manufacturer of Bio-Acetaldehyde :
Acetaldehyde has a wide range of applications and is a raw material in the manufacture of many everyday products, such as paint binders, plasticisers and super absorbents in baby nappies.

Acetaldehyde is also used in the manufacture of various types of building materials, fire protection paints, synthetic lubricants and explosives. In the pharmaceutical industry, it is used, among other things, in the manufacture of vitamins, sleeping aids and sedatives.

Acetaldehyde is also often used as a base when producing acetic acid, which is also a basic chemical with many uses.

In the food industry, Acetaldehyde is used in the manufacture of preservatives and flavor's and occurs naturally in fruit and fruit juices.

Acetaldehyde arises naturally during fermentation and is found in low levels in foodstuffs such as milk products, soy products, pickled vegetables and nonalcoholic beverages.

Sekab produces Acetaldehyde industrially by the catalytic oxidation of ethanol. The production process takes place with renewable bioenergy in a closed-loop system and with as little toxicological effect as possible.

Acetaldehyde is a complicated chemical to handle since it reacts easily with other chemicals and with the oxygen in the air. This implies fire hazard and explosion risk and puts demands on safe handling.

Acetaldehyde has short shelf life, which puts demands on warehouse logistics. Sekab can ensure and satisfy all of these requirements and conditions.

Propionic anhydride is a colorless liquid with a pungent odor, used chiefly as an acylating agent, e.g. as a raw material for dyes, pharmaceuticals, agrochemicals and fragrance chemicals. Propionic anhydride is also used for the production of cellulose acetate propionate.

Health and Nutrition : lowest cost producer and fully backward integrated Vitamin B3 (Niacin + Niacinamide): Global Mkt Size: 60,000 MT/ Year.

Major application in Animal Feed (~60%), followed by Human Food (~25%), Cosmetics & Others Vitamin B4 (Choline Chloride) is a major feed supplement in Poultry, Diary, Swine and Aqua. Advantage.

Backward integrated : For Vitamin B3 (Niacimanide & Niacin), 100% in-house sourcing of Beta Picoline (Key RM)

Company has 20+ products in Poultry for egg , immunity , liver, feed , quality enhancer solutions. In Dairy. Company provides 6 product solutions in as Milk enhancer and quality enhancer where as in aqua company has 5+ products as solutions for feed, efficiency & quality enhancer

JIL also offer custom development and manufacturing (CDMO) solutions ranging from route design, process development, process optimisation, scale-up and commercial manufacturing of intermediates from a few kilograms to multi metric tones of specific products in cGMP.

Compliant manufacturing facilities for global customers, across pharmaceuticals, agrochemicals and other life science chemicals industries. It has evolved to become one of the global suppliers catering to more than 50 countries across the world.

Company is handling Complex 10-12 Synthetic Steps incl Chiral Synthesis, Cyanation, Oleum, hydrogenations, Halogenations & many more. (Chiral was something a big breakthrough for DIVIS)

Pharma Pipeline (7 ingredients): phases and stages.
Phase III: 4 Intermediate’s for Anti-Viral therapeutic, Cosmetic Applications
Phase II: 3 Intermediate's for Antineoplastic, Antiretroviral, Antithrombotic therapeutic.

Agro Pipeline (4 ingredients):
Stage III (Development and Launch): 1 Intermediate in field trial / long term toxicity data generation
for Insecticide application
Stage II (Efficacy & Toxicology study): 3 Intermediates for Insecticide & Fungicide Applications.

JIL is present in almost the entire value-chain in discovery. Under commercial supply, its product
offering consists of feedstock, specialty building blocks, specialty chemicals, n-1/n-2 GMP intermediates. In agro-chemicals, it offers innovator clients a joint R&D
program.

It supplies intermediates through specialty building blocks and specialty chemicals to agri-customers during early stage of molecule development. In nutrition, it has presence across the value chain starting from raw materials, health ingredients, formulations and pre-mixes

40% Revenue from Exports 25% from Americas, Europe & Japan. Expertise in 35 Chemistry Platforms. ~2,100 Global Workforce.

Future ahead growth, capex and progress.

Specialty chemicals:
Forward integration of our Ketene capability and growing.
Demand of Diketene derivatives Looking at the growing demand of global customers.
(Pharma & Agro) and their de-risking strategy from China.

Launch of 6 Diketene derivatives. Subsequently, add 8 value-added Diketene derivatives. CDMO Expansion - Invest in GMP & Non-GMP multi- product facility for Pharma & Crop Protection customer. Indicative Investment of about Rs. 550 Cr. in 3 years. Usually Asset TO is 2.2 +

Nutrition & Health Solutions:
Expand Vitamin B3 capacity ~20% from current 13,000 MT/ Year and launch various value-added grades of Vitamin B3. Upgrade facility to US DMF & European CEP compliant and enter regulated pharma market of Niacinamide.
Investment about Rs.100 Cr. 3 yrs

Life Science Chemicals :
No new facility globally. Invest in another Acetic Anhydride facility to increase capacity by ~35% and
further strengthen global leadership. Indicative Investment of about Rs 250 Cr. in 3 years

DIKETENE – KEY OPPORTUNITY
Laxmi Organics is the only manufacturer of Diketene Derivatives in India. India has ~40% import dependency. Company plans to Invest in new facility for launch of 6 Diketene derivatives.
Subsequently, add 8 value- added Diketene derivatives.

Valuations and overview:
Overall on 1000 Cr capex , asset TO of 2 we can say Company can add 2000 cr revenue.
Let’s say it takes 2-2.5 years to build this 5000 cr revenue and EBIDTA margins ( can expand though)
let’s take only 17% , it gives us 850 cr EBIDTA and 9% PAT 450 Cr.

On EV/EBIDTA of 10 , Company can
have share price of 480+. On PE multiple for ROCE of 17-20% company and ~ 25% profit growth , we
can have 25 times. Which gives market cap of 11000 Cr which is 2 times from here.

We recommended Jubilant life science as a demerger play. Right from NCLT to actual separation, it made a return on 670 Rs cost a share to 1 Pharmova and 1 Ingrevia. These Ingrevia shares received as free shares for clients.

#jubilantingrevia #jubilantgroup
#jubilantlifesciences #ingrevia