Anupam Rasayan IPO: Anupam Rasayan, established in 1984, is one of the leading companies engaged in the custom synthesis and manufacturing of speciality chemicals in India. Anupam Rasayan listing will happen on BSE & NSE. The issue opens on 12 Mar 2021 and closes Date 16 Mar 2021. The Price Band is Rs 553-Rs 555 and the Market Lot size is if 27 shares and the multiple thereof. The Issue Size is Rs 760 cr and Total no of shares offered are 13,693,693.  

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Anupam Rasayan has two business verticals:  

1)     Life sciences (90% of the revenue), which caters to agrochemical, personal care and pharma

2)     Other speciality chemicals (10% of the revenue), which includes pigment & dyes, polymer additives, etc.

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Anupam Rasayan’s Exports contribute over 60% of ARL’s total business, while the rest comes from the domestic market. The company operates 6 manufacturing facilities in Gujarat with an aggregate installed capacity of 23,438 metric tonnes (MT). ARL has a dedicated in-house R&D facility recognized by The Department of Scientific & Industrial Research. Benzene derivates and phenol are the key raw materials used, of which 20-25% are imported.

Life Sciences Speciality Chemicals:

Anupam Rasayan manufactures a variety of intermediates and ingredients for insecticides, fungicides and herbicides for agrochemical companies. Besides it also manufactures anti-bacterial and ultraviolet protection ingredients for FMCG and pharma companies. Over the period of FY18-20, life sciences revenue grew at a CAGR of 26.3% to Rs 504 cr, while during 9M FY21, this segment posted YoY revenue growth of 40.7% to Rs 506 cr.

Anupam Rasayan has developed a strong long term B2B relationship with many MNCs, which enables the company to supply its products in domestic as well as in their respective international markets. As a fallout of the pandemic, many global pharma and FMCG players are looking to India as a replacement vendor in place of China, which is a significant opportunity for Indian chemical companies, including Anupam Rasayan. The company has significantly expanded its portfolio of chemical intermediates from 25 to 41, which has increased its product offerings. Ventura Securities expect the revenues from this segment to grow at a CAGR of 23.7% to Rs 956 cr by FY23.

Other Speciality Chemicals:

Anupam Rasayan other speciality chemicals find applications in pigments, dyes and polymer additives. Although this segment contributes only 10% to the overall revenue, it has the potential to grow faster in the coming years. Increasing use of pigments and dyes in the textile and paint industry is expected to fuel growth in this segment. Over the period FY18-20, revenues from this segment degrew at a CAGR of 1.4% to Rs.25 cr due to limited product offerings. But similar to the life sciences speciality chemical segment, revenues from this segment have catapulted to 34 cr (171.8% YoY) in 9M FY21. Ventura Securities expect the revenues from this segment to grow at a CAGR of 56.8% to Rs 95 cr by FY23.

Anupam Rasayan Valuation:

At the higher price band of Rs 555 per share, Anupam Rasayan is valued at 36.1X FY23 earnings. Ventura Securities recommend a SUBSCRIBE for listing gains.