Tata Chemicals Share price and Fundamental Analysis

Company History

Tata Chemicals Limited (TCL) is a science-led sustainable chemistry solutions Company and is a part of the Tata Group. The Company operates through two verticals, Basic Chemistry (Alkali Chemicals-soda ash, sodium bicarb, salt, silica & other halogen chemicals) and Specialty Products (specialty silica, prebiotics & formulations, agrochemicals and seeds). The Company's product portfolio provides key ingredients to many of the world's leading brands for glass, detergents, pharma, food, animal feed and other industries. It is a global major in soda ash and sodium bicarbonate with manufacturing facilities in India, US, UK and Kenya.

Tata Chemicals is the pioneer and market leader in India's branded Iodized salt segment. The company sells pulses and spices under the 'Tata Sampann' brand. The company's Tata Swach range of water purifiers includes a low-cost, nanotechnology-based purifier that provides safe drinking water at affordable prices. The company also makes nutraceuticals for healthy and tasty modern food. With its Farming Essentials portfolio, the company through its subsidiary Rallis India has a strong position in the crop protection business.

Tata Chemicals Ltd was incorporated as a Public Limited Company on January 23, 1939. In year 1942, the Company completed the bromine plant, the first unit of the company's chemical works. In the year 1943, they commissioned the auxiliary power plant. Also, they commenced the production of caustic soda, liquid chlorine, bleaching powder, hydrochloric acid and zinc chloride.

In February 1944, the Company started the soda ash production. During the year, the company was given the rights to manufacture salt and marine minerals and to use limestone and other raw materials within the Kathiawad region. In the year 1949, they started the production of sodium bicarbonate. During the year 1952-53, they increased the Soda ash capacity from 50 to 100 tonnes per day. Also, they started production of technical grade benzene hexachloride (a pesticide) during the year 1955-56 starts so as to utilise surplus chlorine.

In the year 1957, the Company in association with Fison Pest Control formed a joint venture company name Tata Fisons. They introduced Ethylene dibromide, a new product from bromine. Also, they started production of an insecticide, namely copper oxychloride. During the year 1957-58, they launched a major expansion programme to increase capacity of products. In the year 1959, they completed the first phase of expansion. During the year 1961-62, they started production of dense soda ash.

In the year 1964, the company completed their expansion programme and the soda ash capacity touched 400 tonnes per day. In the year 1971, they discontinued sale of chemicals through Tata Oil Mills (TOMCO) and starts selling on their own. In the year 1974, they set up Tata Energy Research Institute with an initial contribution of Rs 1 crore. During the year 1977-78, they started shipping division and also set up a wholly owned investment subsidiary, namely Roshan Investments Ltd.

During the year 1979-80, the company established Tata Chemicals Society for Rural Development to improve quality of life in Okhamandal villages. In the year 1983, they launched Tata Salt, India's first iodised, vacuum evaporated and branded salt. In the year 1992, they launched Tata Shudh' detergent. In the year 1993, the company started a new cement plant at Mithapur. In the year 1994, they commissioned the fertilizer plant at Babrala. In the year 1996, the company received ISO 9001 certification.

The production severely affected due to earthquake on January 2001 and the accidental fire in the power plant on March 2, 2001. During the year 2002, the company's Mithapur plant was awarded ISO-14001 certification and also the Chemicals Division at Mithapur was awarded the ISO-9001-2000 Migration certificate. In the year 2003, Tata Salt was ranked No. 1 Food brand in Brand Equity Survey of India's most trusted brands. The fertiliser plant got ISO-14001 and OHSAS-18001 certified.

In the year 2004, the company set up the Innovation Centre to develop world-class R&D capability in the emerging areas of nanotechnology and biotechnology. In the year 2005, the company acquired equal partnership in Indo Maroc Phosphore SA (IMACID) along with Chambal Fertilisers and global phosphate major, OCP of Morocco. In the year 2006, the company completed the acquisition of UK-based Brunner Mond Group, one of the world's leading manufacturers of soda ash and associated alkaline products.

In January 2007, the company set up 50:50 joint venture in association with Total Produce, Ireland, the third largest fruits and vegetable distribution company in the world, namely Khet Se Agriproduce Pvt Ltd. This JV was formed with the objective of bridging the gap between producer and end consumer in fresh produce business, which will significantly increase efficiencies, improve shelf-life and reduce product loss in the supply chain.

During the year 2007-08, the company acquired General Chemical Industrial Products Inc, one of the large soda ash players in the US market, for a total consideration of USD 1005 million. As a part of the GCIP acquisition structure, they set up a 100% subsidiary in Mauritius, namely Wyoming 1 (Mauritius) Pvt Ltd. Also, they set up downstream subsidiaries, namely Wyoming 2 (Mauritius) Pvt Ltd, Gusuite Holding (UK) Ltd and Valley Holdings Inc. (US) were incorporated at Mauritius, UK and US respectively. They also set up a 100% subsidiary in Singapore, namely Tata Chemicals Asia Pacific Pvt Ltd.

During the year, the company undertook field research on Jatropha, a non-edible tree crop for biodiesel production. They set up a research farm in Aurangabad and started varietal trials for developing a package of practice. Also, they set up multi location trials for Jatropha in Gujarat, Maharashtra, Tamilnadu and Andhra Pradesh. The company acquired land on the outskirts of Pune for constructing a state-of-the-art dedicated R&D centre, which will become its central knowledge hub.

During the year 2008-09, the company through the wholly owned subsidiary Tata Chemicals Asia Pacific Pte Ltd entered into a joint venture agreement by investing SGD 15 million in JOil (Singapore) Pte Ltd, a Jatropha seeding company based in Singapore. The company holds 33.80% stake in JOil. In May 2008, the operations of Khet-Se began with the launch of its first state-of-the art procurement and distribution facility for fresh fruits and vegetables at Malerkotla, Punjab.

During the year 2009-10, the company set up a bio-ethanol test plant of 30 KLPD at Nanded, Maharashtra as a part of their Biofuel Research and Development Programme using non conventional raw materials. They launched a nanotech water purifier which uses natural materials and cutting edge nanotechnology under the brand name 'Tata Swach'. The product was initially launched in Maharashtra and Karnataka.

In November 2009, the company acquired 5,362,923 shares of Rallis India Ltd (Rallis). By virtue of such acquisition, the shareholding of the company in Rallis went up to 50.06% and thereby making Rallis as their subsidiary with effect from November 9, 2009.

During the year, the company launched their Alkakarb, branded bicarbonate in the Indian market, aimed at animal feed application. As the domestic market matures and grows, the company will introduce all the other brands in their portfolio in India produced in their state-of-the-art plant in the UK.

During the year, the company took steps to increase salt production at their Mithapur plant through de-bottlenecking to further boost the volumes available for sale. The company is setting up 1.32 Lakh MT capacity Customized Fertilizer plant at Babrala. In August 2010, the company signed a public-private partnership agreement with the Department of Science and Technology and Central Salt and Marine Chemicals Research Institute for setting up a 3 tonne per day sulphate of potash fertiliser plant in Gujarat as a joint research project.

During the year 2010-11, the company launched their Sodakarb, branded bicarbonate in the Indian market, aimed at food applications. They done the pilot launch of I- Shakti pulses in the states of Tamil Nadu and Maharashtra. The pilot was aimed to integrate the strength of the company's presence in both farm and consumer facing ends of the business. As a part of their Biofuels Research and Development Programme using non conventional raw materials, the Company set-up a bio-ethanol test plant of 30 KLPD at Nanded, Maharashtra. The company now plans to set up a first generation bioethanol plant based on sugarcane only at Mozambique.

During the year, the company acquired South Africa's Grown Energy which controls 95% stake in Grown Energy Zambeze to build biofuels capabilities in Mozambique. In December 30, 2010, Rallis India Ltd, a subsidiary of the company, acquired 60.21% stake in Metahelix Life Science Ltd, a research led seeds company. This acquisition will firm up the company's presence in the entire Seeds Value Chain that comprises breeding, production and marketing of seeds.

In January 2011, the company, through their wholly owned overseas subsidiaries Tata Chemicals Europe Ltd, acquired 100% stake in British Salt held through Cheshire Salt Holdings Ltd.

During the Same year, the company invested in Greenfield Port-based Ammonia-Urea Fertilizer Manufacturing Complex in Gabon, Africa. The company signed technical services agreement with Notore Chemicals Industries of Nigeria, for providing technical advisory services. The company also acquired stake in EPM Mining Ventures. The company also Signed the Pre Construction Services Agreement with Technip for the Gabon Fertiliser Project.

In 2012, the company won the prestigious Employer Branding Award 2012, for 'Best HR Strategy in Line with Business Strategy', instituted by the World HRD Congress.

In 2013, the company won numerous awards like, three awards at FAI Golden Jubilee Awards etc. The company signs MoU with the Institute of Chemical Technology to set up endowment chair of Rs 3.5 crore.

In 2014, the company inaugurates its new Innovation Centre in Pune. Homefield International Pvt. Ltd., (Mauritius) was amalgamated with the Company. A new Tata Chemicals Innovation Centre was inaugurated in Pune.

On 30 May 2014, Olam International Limited (Olam) and Tata Chemicals Limited (TCL) signed a termination agreement. TCL has decided not proceed with its proposed 25.1 percent equity participation in the greenfield ammonia-urea fertiliser manufacturing project (GFC) in the Republic of Gabon, Africa. On April 11, 2011, the parties announced TCL's participation in the project in which Olam currently holds 80 percent stake with the Government of the Republic of Gabon (ROG) holding the remaining 20 percent. This decision was made due to a change in TCL's investment focus away from overseas fertiliser manufacturing and Olam's intention to move to a minority and non-consolidated position in the project.

In 2015, Tata Chemicals' Babrala plant bags NSCI's Suraksha Puraskar at the National Safety Awards.

On 7 October 2015, Tata Chemicals (TCL) announced the launch of a new brand, Tata Sampann, under its consumer products business. Launched with a focus on delivering food products that fulfill everyday needs of nourishment, Tata Sampann will act as an umbrella brand and will house the current and the future food portfolio including the unpolished high-protein dal range and low-oil absorb besan made from 100 percent chana dal. 'Sampann', a Hindi word, means 'enriched, prosperous, complete' and connotes the brand's purpose to offer that extra nourishment in daily foods.

On 15 October 2015, Tata Chemicals announced the launch of Tata Sampann Spices under its Consumer Products Business. Following a phase-wise, roll-out plan, Tata Sampann Spices would be available across the northern market by the end of the year, followed by the west, east and south market. The spices category aims to leverage Tata Salt's vast distribution network that caters to 120 million households across the nation.

Tata Chemicals Board of Directors at its meeting held on 10 August 2016 considered and accepted the recommendations of the committee of directors as well as the audit committee for the transfer of the business of sale and distribution of urea and customised fertilisers, manufactured by the company at its plants located in Babrala, Uttar Pradesh (Urea Business), by way of a slump sale by the company to Yara Fertilisers India Private Limited (Yara India) pursuant to a scheme of arrangement (Scheme) approved by the board subject to all requisite regulatory and other approvals and sanction by the High Court/ National Company Law Tribunal (NCLT) in the manner agreed by the company and Yara. The lump sum consideration for the transfer of the Urea Business of the company by way of a slump sale pursuant to the Scheme is Rs 2670 crore, subject to certain adjustments after closing, as agreed between the parties in terms of the definitive agreements and the Scheme.

The Board of Directors of Tata Chemicals Limited at its meeting held on 6 November 2017 considered and accepted the recommendations of the Committee of Directors for sale, disposal and transfer of Phosphatic Fertilisers business, and the trading business comprising of bulk fertilisers and non-bulk fertilisers (Phosphatic Business), by way of a slump sale, on a going concern basis, by the Company to IRC Agrochemicals Private Limited (IRC), a wholly owned subsidiary of Indorama Holdings BV, Netherlands (part of Indorama Corporation Pte Ltd., Singapore 'Indorama') on the terms and conditions laid down in the Business Transfer Agreement (BTA). The transaction would involve transfer of Haldia Plant, Trading Business of bulk and nonbulk fertilisers along with immovable, movable properties, working capital and product brands but excluding outstanding subsidy amounts. The lump sum consideration for the transfer of the Phosphatic Business of the company by way of a slump sale is Rs 375 crore, subject to certain adjustments after closing, as agreed between the parties in terms of the BTA.

On 22 March 2018, Tata Chemicals announced the launch of Medikarb - India's first branded pharmaceutical grade sodium bicarbonate for pharma API and formulation manufacturing. Medikarb will be manufactured in state of the art FDA certified facilities that are compliant with GMP standards to ensure the highest quality product conforming to Indian Pharmacopoeia specifications. Sodium bicarbonate is a vital ingredient in the production of effervescent antacids, analgesic tablets and powders, vitamin supplements, injectable powders, toothpaste and antacid gel formulations. It is also used as a buffering agent, providing bicarbonate ions to balance the pH during blood purification.

As on 31 March, 2018, the Company had 36 (direct and indirect) subsidiaries (5 in India and 31 overseas) and 5 joint venture companies.

On 8 April 2018, Tata Chemicals signed a Business Transfer Agreement with Allied Silica Limited to acquire their business of precipitated silica for a consideration of Rs 123 crore, on a slump sale basis, including the acquisition of an existing manufacturing site in Tamil Nadu, which will produce Highly Dispersible Silica (HDS).

On 1 June 2018, Tata Chemicals sold its Phosphatic Fertilisers business and Trading business comprising bulk and non-bulk fertilisers, by way of a slump sale on a going concern basis, to IRC Agrochemicals Private Limited dated 6 November 2017.

On 18 June 2018, Tata Chemicals acquired Silica business from Allied Silica, which is a part of Rs. 295 crore investment approved by the Board during February 2017, towards this specialty business.

During the FY2019, the Company approved capex of Rs 2400 crore towards debottlenecking and capacity expansion for all products at Mithapur plant. The Board of Rallis has approved a capex of Rs 800 crore towards expansion of formulation capacity and building technical and associated intermediary products manufacturing capacity for backward integration. The company signed Memorandum of Understanding with CSIR-CECRI, Karaikudi, ISRO and C-MET to strengthen lithium strategy.

As on March 31, 2020, the Company had 35 (direct and indirect) subsidiaries (4 in India and 31 overseas) and 5 joint ventures.

During the year 2019-20, the Company through its wholly-owned subsidiary, Valley Holdings Inc., acquired the remaining 25% partnership interest in Tata Chemicals (Soda Ash) Partners Holdings in the United States and with this acquisition, it increased its ownership to 100% on December 19, 2019.

The NCLT, Mumbai Bench, and NCLT, Bengaluru Bench vide their Orders dated December 20, 2019 and November 11, 2019 respectively, sanctioned the Scheme of Merger by absorption of Metahelix with Rallis and their respective shareholders. Accordingly, Metahelix, a step-down subsidiary of the Company, has merged with Rallis India Limited and ceased to be a subsidiary of the Company effective February 1, 2020.

During the year 2019-20, the Company had demerged consumer product business as per Scheme of Arrangement amongst Tata Consumer Products Limited (formerly Tata Global Beverages Limited) (TCPL) and the Company and their respective shareholders and creditors, which became effective on February 7, 2020. Pursuant to the Scheme becoming effective, the CPB is demerged from the Company and transferred to and vested in TCPL with effect from April 1, 2019, being the Appointed Date.

During the year 2020-21, PT Metahelix Life Sciences Indonesia, a subsidiary of Rallis, approved the cancellation of its Company Registration Number and revocation of its business license effective from March 19, 2021.

As on March 31, 2021, the Company had 33 direct and indirect subsidiaries, i.e., 2 in India and 31 overseas and 4 joint ventures.

During 2021, the Company invested Rs. 9 crore in Tata Steel Limited wherein the partly paid shares of Tata Steel were converted to fully paid shares. Apart from this, it sold 12,85,110 shares in Tata Teleservices Limited.

The Hon'ble National Company Law Tribunal (NCLT), Mumbai Bench on April 23, 2020 approved the Scheme of Merger by Absorption of Bio Energy Venture-1 (Mauritius) Pvt. Ltd., a wholly owned subsidiary, with the Company, being the Appointed Date, April 1, 2019. The name of Bio-1 was removed by the Registrar of Companies at Mauritius, effective from June 1, 2020, and consequently, Bio-1 has ceased to be subsidiary of the Company with effect from the said Date.

The NCLT Mumbai, vide its Order dated February 20, 2020, sanctioned the Scheme of Amalgamation between Zero Waste Agro Organics Limited and Rallis on February 22, 2020, being the Appointed Date, April 1, 2017. The Effective Date of the Scheme stood July 9, 2020 and accordingly, Zero Waste has ceased to be a subsidiary of the Company, effective from the said Date.

Rallis Chemistry Exports Limited, a wholly owned subsidiary of Rallis (RCEL) has been struck-off from Registrar of Companies with effect from March 29, 2021 consequent to voluntary striking-off application filed by it with the ROCs, Maharashtra, Mumbai. Accordingly, RCEL ceased to be a subsidiary of the Company with effect from the said Date.

In Aug' 21, the Company commissioned Carbon Capture and Utilisation plant (CCU) for capturing CO2 from its gas-fired Combined Heat and Power plant (CHP) at Winnington, Northwich.

In FY 2021-22, the Company launched Crop Protection: PePe: Herbicide for rice; Prodim: Herbicide for soybean; and Zaafu: Fungicide for rice; Crop Nutrition: AQUAFERT Foliar Apple; AQUAFERT Foliar Cotton; SURPLUS - Kerala grade and Bio-pesticides: Ralli DERMA; Ralli FLOMONAS; Ralli PECILO WP; and Ralli BACTILIS.

During year 2022-23, the wholly owned subsidiary, Cheshire Compressor Limited y ceased to be a subsidiary of the Company with effect from March 14, 2023. Tata Chemicals (Soda Ash) Partners was converted into a Limited Liability Corporation (LLC) and renamed Tata Chemicals Soda Ash Partners LLC with effect from April 3, 2023. Further, TCSAP LLC, another subsidiary, was merged with the above subsidiary with effect from April 3, 2023. The Company started construction of a new pharmaceutical grade salt manufacturing facility and associated warehousing in 2023.