India’s plastic market has grown by more than 2,000% over the past 30 years, while the plastic resin market has historically outpaced the country’s GDP growth. INEOS Styrolution India Ltd is part of the INEOS Group, one of the largest chemical companies in the world. INEOS is headquartered in Frankfurt, Germany, and is a global leader with unrivaled experience and 90 years of experience in styrenic plastics. The company was founded by combining the styrenic businesses of BASF and INEOS. INEOS has an annual turnover of approximately $61 billion with 194 facilities and 26,000 employees worldwide. INEOS Styrolution India Ltd is today a market leader in ABS plastics and polystyrene. It is the leading producer of ABS and SANs serving a diverse range of applications such as automotive, electronics, construction, healthcare, packaging and other segments. ABS or Acrylonitrile Butadience Styrene is a plastic resin applied in automotive exterior and interior, helmets, office equipment, electronic devices and many household applications. On the other hand, SAN or Styrene acrylonitrile plastic resin is applied in industrial products, cosmetic jars, electrical and household applications, stationery, etc. Other major products are INEOS Styrolution GPPS and HIPS which are suitable for injection molding from food packaging to refrigerators. components, healthcare and diagnostic laboratories, toys, plastic cups, containers and food packaging products. In April 2022, INEOS Styrolution APC Pte Ltd (Promoter) holding a 75% stake in the Indian company offered to sell 14.40% of the Indian company’s total paid-up share capital with an additional put option of 9.60% through an offer. for sale (OFS). In accordance with the SFO, the promoters only sold 13.81% of the shares on April 19, 2022. To support the economy after Covid, the government has also put in place initiatives such as the incentive program linked to production (PLI), Atmanirbhar Bharat and capex investment in infrastructure to stimulate economic growth. Unfortunately, there are currently many headwinds such as the risk of inflation, the ongoing war between Russia and Ukraine, rising commodity prices and supply chain disruption. But Indian economists expect the situation to improve in the short term and to perform better than many other Asian and European countries. INEOS management expects the economy to stabilize and a strong recovery for its products in financial year 2023. Typically ABS and plastics are up 1.5 times GDP and as a result INEOS management expects double digit growth levels for 2023 on the back of demand from electronics, household products and the two-wheeler segment. The company also expects decent margins for the ABS and polystyrene segment. The company has announced an interim dividend of Rs 105 per share with a record date of June 6. Analysts and brokers are recommending INEOS Styrolution stock currently listed at Rs 950 to their portfolio clients for an investment period of twelve months.
Rajiv Kapoor is a Stock Broker, Certified Mutual Fund Expert and MDRT Insurance Agent.