Anupam Rasayan IPO aggregating up to Rs 760 crore is an entirely fresh issue of equity shares and proceeds of the issue would be mainly used to pay the debt. Anupam Rasayan is one of the leading companies engaged in the custom synthesis and manufacturing of speciality chemicals in India. The issue opens on 12 Mar 2021 and closes on 16 Mar 2021.
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Anupam Rasayan IPO Details:
| IPO Open | 12 March 2021 |
| IPO Close | 16 March 2021 |
| IPO Size | ₹760 Crore |
| Face Value: | ₹10 |
| Issue Details | Fresh Issue of Equity Shares aggregating upto ₹ 760 Cr |
| Price Band | ₹ 553 – 555 |
| Bid Lot | 27 Shares |
| Issue Structure : | |
| QIB | 50% of the net offer |
| NIB | 15% of the net offer |
| Retail | 35% of the net offer ( 4,723,424 Shares ) (₹ 262.17 Cr) |
| Appls. needed for 1x Retail | 2,77,848 |
| BRLMs | Axis Capital, Ambit Pvt. Ltd., IIFL Securities, JM Financial |
| Registrar | KFin Technologies Pvt. Ltd. |
Updates & Indicative Time Table:
- ANCHOR ISSUE: IPO bound Anupam Rasayan raised Rs 225 crore from 15 anchor investors, ahead of its initial share-sale. The15 anchor investors include AdityaBirla Sunlife Mutual Fund (MF), Nomura Funds Ireland Public Ltd Company, Fidelity International, Sundaram MF, SBI Life Insurance Co, IIFL Special Opportunities Fund, Malabar Select Fund and Max Life Insurance.
- Indicative Timetable
- Finalization of Basis of Allotment 19 March 2021
- Refunds/Unblocking ASBA Fund 22 March 2021
- Credit of equity shares to DP A/c 23 March 2021
- Trading commences : 24 March 2021
About Anupam Rasayan
- Anupam Rasayan was Incorporated in 1984 and is today one of the leading companies engaged in the custom synthesis and manufacturing of specialty chemicals in India.
- Company’s key focus is developing in-house innovative processes for manufacturing products requiring complex chemistries and achieving cost optimization.
- Its business is organized in 2 verticals;
- Life Science related specialty chemicals that are used in agrochemicals, personal care, and pharmaceutical sector
- other specialty chemicals: Use in pigment & dyes, polymer additives etc.
- Anupam Rasayan has a strong long-term relationship with many multinational companies like Syngenta Asia Pacific Pte Ltd, Sumitomo Chemical Company Ltd, and UPL Limited.
- It has 6 manufacturing facilities at Sachin and Jhagadia, all in Gujarat with an aggregated installed capacity of 23,438 MT.
Anupam Rasayan IPO: Financials
| Particulars / Rs. Cr | 9mFy21 | 9mFy20 | Fy20 | Fy19 | Fy18 |
| Revenue from Operations | 539.22 | 371.81 | 528.88 | 501.5 | 341.43 |
| Revenue Growth (%) | 45.03% | – | 5.46% | 46.88% | – |
| EBITDA | 130.76 | 102.02 | 134.9 | 92.17 | 74.51 |
| EBITDA (%) | 24.25% | 27.44% | 25.51% | 18.38% | 21.82% |
| Profit Before Tax | 66.76 | 55.16 | 71.37 | 65.72 | 49.77 |
| Net Profit | 48.09 | 42.81 | 52.98 | 50.21 | 40.34 |
| Net Profit (% ) | 8.92% | 11.51% | 10.02% | 10.01% | 11.82% |
| Equity Share Capital | 86.21 | 50 | 50 | 50 | 50 |
| Reserves | 738.31 | 533.52 | 543.72 | 457.11 | 407.64 |
| Net worth | 824.52 | 583.52 | 593.72 | 507.11 | 457.64 |
| Long Term Borrowings | 516.21 | 490.47 | 524.24 | 462.3 | 267.82 |
| Short Term Borrowings | 186.94 | 192.84 | 237.11 | 154.41 | 122.98 |
| RoNW (%) | 6.78%^ | 7.85%^ | 9.62% | 10.21% | 11.78% |
| Net Asset Value (₹ )as stated | 95.64 | 74.69 | 76 | 67.95 | 61.32 |
| FV | 10 | ||||
| EPS (₹ ) | 6.03 | 5.67 | 6.94 | 6.6 | 6.59 |
| Equity Post IPO | 99.9 | ||||
| IPO Price | 555 | ||||
| EPS (Post IPO) FY20 | 5.30 | ||||
| PE | 104.65 | ||||
| EPS ann on sep’218mF21 | 6.42 | ||||
| PE ann 9mFY21 | 86.47 | ||||
| Market Cap | 5544 | ||||
| Market Cap / Sales | 10.5 |
Pros
- Diversified product portfolio and customer base spread across geographics
- In-house R&D team for product innovation
- Strategically located manufacturing plants
- Exceptional financial performance and long term business plan
- Experienced management
Cons
- Susceptibility of margins to forex risk
- Working capital intensive nature of operations.
- Company operations are subject to increasingly stringent environmental, health and safety laws, regulations and standards. Non-compliance with and adverse changes in health, safety, labour, and environmental laws and other similar regulations to our manufacturing operations may adversely affect our business, results of operations and financial condition.
- Companies manufacturing facilities are concentrated in a single region.
Anupam Rasayan IPO: Assessment
- As per F&S Report, India’s specialty chemicals industry is expected to grow at a CAGR of ~10% to 11% over the next five years mainly, due to rising demand from end-user industries coupled with tight global supply as a result of stringent environmental norms in China.
- Anupam Rasayan India Limited® is one of the leading companies engaged in the custom synthesis and manufacturing of specialty chemicals in India.
- Apart from supplying to many MNCs, some customers have been buying company’s products for over 10 years. In the period ended 9 months ended December 31, 2020, Anupam Rasayan manufactured products for over 53 domestic and international customers, including 17 multinational companies.
- Its revenue from operations from the different markets is depicted below:
- The company has posted revenue growth of ~24% CAGR between FY2018 to FY2020.
- The company has posted revenue growth of 45.0% for the nine month period ending December 2021.
- The Government of India has recognized the Company as a three-star export house.
- It has developed a strong R&D structure to drive company growth
- Anupam Rasayan IPO price of Rs. 555 is very steep and company is seeking PE multiples of over 80x on the diluted post IPO equity capital (FY21E) and thus issue is very aggressively priced.
- Company’s margins are likely to improve post IPO due to debt reduction but the valuations being demanded are more than the established and reputed peers like PI industries, SRF which have much better margins and scale.
- Anupam Rasayan IPO was last reported to be commanding a GMP of ~Rs. 190-200.
- I may apply on Anupam Rasayan IPO only if I sense a definite listing gain opportunity in the stock at the last minute as well coupled with a strong QIB response. I may even give it a miss due to steep pricing.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.