- IVP Ltd is a 95-year-old Indian speciality-chemicals maker that began in vegetable oils and now formulates the invisible ingredients inside metal castings, shoe soles and food packaging - the resins, adhesives and foam systems that other manufacturers build with. It got here through two deliberate pivots: first in 1965, when it became India’s pioneer in foundry chemicals through a tie-up with Ashland Inc., and again in 2017-18, when it modernised its plants and entered polyurethane chemistry in 2018. The recurring approach is to take a mature, import-dependent industrial input, make it locally on two large factory sites, and then stretch that same asset base into adjacent chemistries that earn better margins - a strategy of sweating the same tanks and land for higher-value products.
Business segments
Two engines at different stages - a six-decade foundry-chemicals cash cow under margin pressure, and a younger polyurethane platform built on the same factory floors that now supplies everything from footwear foam to food-packaging glue.
1. Foundry chemicals: the legacy backbone under siege
A first-mover franchise that coats and binds the moulds for India’s metal castings, now fighting cheap imports and regional competitors that are squeezing its margins to the low single digits.
- The original import substitute - IVP was the first company in India to make foundry chemicals, starting in 1965 with technology from Ashland Inc., and its phenolic resins and coatings are still formulated to survive the extreme heat and pressure inside ferrous and non-ferrous foundries.
- Sells to the world’s second-biggest casting industry - India produces 12.49 million metric tonnes of castings a year, worth about USD 20 billion, and the business depends heavily on demand from automotive, tractor, railway and construction customers.
- Margin squeeze from all sides - regional players and cheaper imports, especially from China, have intensified price competition, while the MSME foundries that buy these chemicals get hit by volatile coal and pig-iron costs and periodic slowdowns in tractors and commercial vehicles.
2. Polyurethane systems: the higher-margin growth bet on the same factory floor
A younger division, seeded in 2017, that makes the liquid chemicals which become shoe soles and food-packaging glue - and which the company is deliberately steering from low-margin foam into stickier, non-foam applications.
- Footwear foam is the volume engine - proprietary low-density polyurethane (PU) formulations let shoemakers reduce sole weight while keeping durability, and this vertical supplies manufacturers in the world’s second-largest footwear-producing country, where nearly three billion pairs are made annually.
- Packaging adhesives earn the premium - the flexible-packaging line makes solvent-less and solvent-based two-component adhesives that laminate printed plastic films, aluminium foil and paper for food, pharma and personal-care packs, and it carries a margin profile roughly double that of footwear foam.
- Bought, not just built - the PU business was created by modernising the existing Tarapur and Bengaluru plants rather than breaking ground on a greenfield site, and the Tarapur facility still has substantial unutilised land reserves earmarked for further PU expansion without big new capital outlays.
- Deliberately pivoting away from plain foam - the stated strategy is to diversify within PU from foam into non-foam applications such as flexible packaging, chasing higher margins as footwear manufacturers’ push for ever-lighter soles erodes the volume of PU chemicals per pair.
Manufacturing and technology backbone
Two ISO-certified plants and an in-house R&D team support over 150 products, with a recent switch to SAP S/4HANA and a steam-sharing deal that cut costs at the larger site.
- Tarapur is the mother plant - on a 12-acre site with its own steam boilers, nitrogen plant, effluent treatment and power generation, it makes both foundry chemicals and polyurethane, and in mid-2024 it signed a steam-purchase agreement with the neighbouring Bhageria Industries factory to source steam on demand.
- Bengaluru focuses on coatings - the Karnataka plant produces foundry coatings for metal castings at 500 tonnes a month, with dust-extraction systems, a tank farm and a fire-hydrant network.
- R&D as the import-substitution engine - the dedicated research team has delivered proprietary low-density PU shoe-sole formulations, all-weather adhesive systems, and ongoing indigenous development of key chemical inputs, while also providing technical support directly to customers’ factory floors.
- Half the raw materials come from abroad - the company imports 50-55% of its raw-material needs, with prices linked to crude oil, and it hedges its dollar exposure through forward contracts of up to 120 days while passing raw-material price increases through to customers to protect gross margins per kilogram.
- Digital backbone replaced - in October 2024 the company migrated from its legacy RAMCO ERP to SAP S/4HANA Public Cloud, upgrading the system that runs its business processes and real-time analytics.
Group structure and partners
IVP is a publicly listed subsidiary of the Allana Group with a 71.32% promoter stake, no subsidiaries of its own, and a history of inter-corporate funding from its parent.
- The company is listed on the BSE and NSE, with its registered office in Mumbai, and is a subsidiary of Allana Exports Private Limited, part of the Allana Group.
- The promoter group held a 71.32% stake as of FYE22, and the company has no subsidiaries, associates or joint ventures.
- The Allana Group supports IVP through inter-corporate deposits - outstanding ICDs stood at ₹47.7 crore at the end of FY24, carrying an interest rate of 7.25% per annum, reduced from 7.50% per annum from November 2023.
- The CEO, Mandar Joshi, is an IIT Mumbai chemical engineer with over 29 years in the chemical industry including roles at BASF, while the Chairman, Rajkumar Lekhwani, is a chartered accountant with senior leadership experience at P&G, ACG and Crompton Greaves.
- A legacy contingent liability with Mumbai Port Trust over rental demands stood at ₹85.87 crore as of FY24, and the company is challenging the orders before the Bombay High Court.