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12 Feb

The document outlines a course structure focused on fine chemicals, covering topics such as industry overview, chemical patents, economic considerations, and process development. It also discusses financial aspects including forms of ownership, funding options, and private equity in the chemical sector. Additionally, it touches on competitive analysis, mergers and acquisitions, and the implications of greenhouse gas emissions in the industry.

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Krishna Gautam
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0% found this document useful (0 votes)
38 views23 pages

12 Feb

The document outlines a course structure focused on fine chemicals, covering topics such as industry overview, chemical patents, economic considerations, and process development. It also discusses financial aspects including forms of ownership, funding options, and private equity in the chemical sector. Additionally, it touches on competitive analysis, mergers and acquisitions, and the implications of greenhouse gas emissions in the industry.

Uploaded by

Krishna Gautam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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12 Feb

Course structure & Modules


1. Overview of Fine Chemicals as an industry 12. Batch Processes: Scheduling & Equipment
2. Chemical Patents Selection
3. Fine Chemical Case-studies 13. Separation processes in fine chemical industry
4. Economics & business considerations e.g. Batch distillation / Drying / Crystallization
5. The Pharma Industry 14. Safety Considerations during process
6. The Agrochemicals Industry (Dr Roland) development & route selection
7. Competitive Analysis, Balance Sheets and 15. Micro reactors and batch-to-continuous
Financial Statements conversion
8. Analytical Instrumentation and methods 16. Waste reduction, effluent treatment, green
9. Natural products and industrial fermentation chemistry and pollution control strategies
10. Chemical Regulations / REACH
11. Process Development & Scale-up
Competitive analysis through Financial Statements and Balance Sheets

FINANCIALS
Forms of ownership…..

Proprietorship Partnership

Limited / Inc

• Forms of funding?
• Equity vs Debt
• Listing, SME Exchanges,
• Private Equity, Venture Capital
• MCA / SEBI / SEC etc.
Terms you might encounter in career options

• Private Equity
• Venture Capital
• Hedge Fund (vs Mutual Fund!)
• Investment Banking
• Consulting / Management Consulting
• Analysts
What drives M&A?
Any guesses what drove these recent chemical divestures?
GHG potential & M&A
GHG emissions for BASF. Millions of metric tons per
year
Private Equity
1. The Principal Agent Problem Owners vs
Management ( e.g. Board of Directors →
CEO)
2. Planning Horizon lengths & public
disclosures due to regulations
3. Paths ( Promoter to PE; Public to PE)
4. Leveraged Buyouts / Management
Buyouts
5. Money source: hedge funds, pension
funds, university endowments, and rich
people
6. Exit Strategies: 3 to 5 years.
7. Close ended funds for investors: max 10
years
8. Leverage / Debt financing
9. Synergies, Better Management,
Incentives, Skin in game
10. Private Equity vs Investment Banking
Various ways to take a company private
Comments
• Publicly Traded Private Equity
• How is it different from a ETF or Mutual Fund?

• Chemical private equity firms often acquire the noncore business units of large
public companies. Under their previous owners, those businesses often
suffered from neglect, unsuitable performance targets, or other constraints.
• As a counterexample: A hedge fund with a significant stake in a public
company can, without having to buy the company outright, pressure the
board into making valuable changes such as selling unnecessary assets or
spinning off a noncore unit.
• All businesses in a private equity portfolio will soon be sold, they remain in the
spotlight and under constant pressure to perform.
• In contrast, a business unit that has been part of a public company’s portfolio
for some time and has performed adequately, if not spectacularly, generally
doesn’t get priority attention from senior management.
Leveraged Buyout Transaction Structure
VC in Chemicals

• SINE (IITB) and Venture Center (NCL Pune) are


incubators / accelerators. Different from a VC.
• Annual Report
• Balance Sheet
• P&L Account
• Cash Flow Account

• Depreciation Schedules
• EBIDTA= Earning before Interest Tax
Depreciation and Amortization

• Payments are not made at the same


time that goods are sold (i.e. Payment
Terms)
• Equipment is productive over long
spans however price must be paid at
single points in time (“Capitalization of
an expense”)

Assets = (external) Liabilities + Shareholders equity


• Accounts (notation)
Depreciation schedules; gross block and net block

Gross Block – Total accumulated Depreciation → Net Block


Gross Block – Total accumulated Depreciation → Net Block

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