This post on Anupam Rasayan IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) etc. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Anupam Rasayan IPO or not.
Related Posts : Anupam Rasayan IPO Review
Anupam Rasayan IPO: Grey Market Premium etc.
- 16-03-21 GMP 120-130
- 12-03-21 GMP ~ 150 ( hardly any deals)
Subscription: Anupam Rasayan IPO ( x times)
Consolidated Brokerage Views on Anupam Rasayan IPO
Ajcon Global: “At the upper end of the price band of Rs. 555, the Company’s IPO is valued at P/E of 86x on 9MFY21 annualised EPS, 105x on FY20 EPS and 94x on trailing 12 months EPS which is very expensive and steep as against its peers who have a much better ROE profile. We are not comfortable with the aggressive pricing done in this IPO. Hence, we recommend “AVOID” to the issue”
Angel Broking :”Company has strong and long-term relationships with various multinational corporations, including, Syngenta Asia Pacific Pte. Ltd., Sumitomo Chemical Company Limited and UPL Limited. The company has posted strong revenue growth of 24.3% CAGR between FY2018 to FY2020. Despite the impact of the COVID-19 pandemic, company has posted revenue growth of 45.0% for the nine month period ending December 2021. Given strong revenue growth and long-term relationships with various multinational corporations we assign a “SUBSCRIBE” rating to the IPO.”
Capital Market : ” Score 42/100; Anupam Rasayan revenues rose 45% to R 539.22 crore in 9M of FY 2021 primarily due to an increase in export sales by 27.87% to R 3,30.95 crore, addition of new products in the life science related specialty chemicals vertical and growth in the volume of existing products. Domestic sales increased by 81.05% to R 204.55 crore as a result of addition of new domestic customers as well as increase in the number of new products in life science related specialty chemicals. Further, its export and domestic sales also increased on account of addition of two new manufacturing facilities, namely, Jhagadia Unit -5 and Sachin Unit – 6, which were commissioned in March 2020. Operating margins fell 320 bps to 24.3% resulting into 28% increase in operating profit to R 130.76 crore. Net profit was up 12% to R 48.1 crore. For FY2020, net sales rose 5% to R 528.88 crore. The operating margins rose 690 bps to 25.5%, resulting into 45% increase in operating profit to R 134.9 crore. Net profit was up 6% to R 52.98 crore. At the higher price band of R 555, the offer is made at around 94.4 times its TTM EPS of R 5.9 for the period ended December 31, 2020 on a post-issue equity share capital of R 99.1 crore of face value of R 10 each. Listed industry peers of the company are PI Industries, Navin Fluorine International and Astec Lifesciences. PI Industries trades at 52 times its TTM EPS of 44.1 for the period ended December 31, 2020 at the current market price of R 2291. Navin Fluorine International trades at 29 times its TTM EPS of 92 at the current market price of R 2690. Astec Life Sciences trades at 28 times its TTM EPS of 36.9 at the current market price of Rs. 1049.”
Choice Broking: “At higher price band of Rs. 555, Anupam Rasayan is demanding a TTM P/E multiple of 95.2x (to its restated TTM EPS of Rs. 5.8), which is significantly higher than the peer average of 33x. Thus the issue seems to be aggressively priced.”
Geojit:”At the upper price band of Rs.555, ARIL is available at a PE of 86.4x (annualized basis on FY21E EPS of 6.4) which is aggressively priced. Focus on R&D, cost rationalization, strong tie-ups with MNCs and improving margin profile, we expect profitability to improve led by higher capacity utilization and reduction in debt. We assign a Subscribe rating, with a long term perspective.”
ICICIDirect: “At Rs. 555, the stock is available at 104.7x FY20. We believe valuations are on the higher side given that it has been facing constraints towards generating FCF owing to higher working capital cycle, leading to a bloated balance sheet and thereby subdued return ratios. We expect lower probability of inventory cycle to get normalised and thereby WC cycle, going ahead.”
Motilal Oswal: “We like ARL given its presence in high growth CSM market, wide product portfolio, strong client relationship and high entry barriers. The company is expected to witness strong growth for next 2-3 years given its recent completion of major capex and strong sectoral tailwinds. The issue is valued at 3.5x FY21 P/BV and 7.7x FY21 EV/Sales on an annualized and post issue basis. Though the valuation appears little on a higher side both on absolute and relative basis, in the current scenario market prefers emerging growth stories. Hence we recommend Subscribe.”
SMC: “Score 2/5 ; The company has developed strong and long-term relationships with various multinational corporations, including, Syngenta Asia Pacific Pte. Ltd., Sumitomo Chemical Company Limited and UPLLimited that has helped it expand product offerings and geographic reach across Europe, Japan, United States and India. In particular, it has been manufacturing products for certain customers for over 10 years. On the Industry front, India’s specialty chemicals industry is expected to grow at a CAGR of approximately 10% to 11% over the next five years, due to rising demand from end-user industries, along with tight global supply on account of stringent environmental norms in China. So, it is expected tat the company is likely to see good growth in long term. However on the pricing front, the issue looks expensive. An investor with long term investment horizon may invest in the issue.”
SP Tulsiyan Website: “Positives of visible topline and bottomline growth is overshadowed by aggressive IPO pricing given (i) poor working capital, (ii) input price risk (iii) future net margins seen below peers. Thus one can give the issue a miss, and instead focus on some of the larger listed peers.”
Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.