One of the leading companies in the cotton synthesis and manufacturing of specialty chemicals in India, Anupam Rasayan India Limited launched its initial public offer (IPO) on March 12, 2021. The offer will close on March 16, 2021 and the company has fixed the price band at Rs 553 – Rs 555 per equity share.

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Avinash Gorakshakar, Director Research at ProfitMart Securities says that Valuation of Anupam Rasayan India are expensive. The Issue coming at a Price/EPS multiple of 43.2x which is at a discount to its listed peer like PI Industries (65.7x), however it is likely to trade at a premium to its peers like Navin Fluorine International Ltd (32.2x), Astec Lifesciences Ltd (42.7) and SRF (30.6x). 

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On Competitive Position he said that as there is no direct competition to Anupam Rasayan, it holds a strategic position in the industry. The company’s core focus on process innovation through consistent R&D, value engineering and complex chemistry helps to create a high entry barrier for others to enter the industry.

Anupam Rasayan India Fundamentals:

He said that the company has strong track record but weak solvency position - Over FY18 to FY21, Revenue has grown at a CAGR of 24%, about 2/3rd revenue coming from Exports, in terms of product mix Life science specialty chemicals contributes over 90%.  ROE <10%, Total Debt to EBITDA stands at 5.6x which is quite high.

Avinash believes good listing gains possible here if one gets allotment.  

Anupam Rasayan Company’s Overview:

It is engaged in custom synthesis and manufacturing of specialty chemicals where its key focus is developing in-house innovative processes for manufacturing products requiring complex chemistries and achieving cost optimization.

They have two distinct business verticals:

(i) life science related specialty chemicals comprising products related to agrochemicals, personal care and pharmaceuticals
(ii) other specialty chemicals, comprising specialty pigment and dyes, and polymer additives.

They have strong and long-term relationships with various multinational corporations, including, Syngenta Asia Pacific Pte. Ltd., Sumitomo Chemical Company Limited and UPL Limited. They manufactured products for over 53 domestic and international customer, including 17 multinational companies. It has 6 manufacturing facilities out of which 4 are situated at Sachin and 2 are located at Jhagadia with an aggregated installed capacity of 23,438 MT.

Anupam Rasayan Business Highlights:

They manufacture specialty chemicals, which are primarily chemical components that improve the properties of Customer’s products, and have, over the years, expanded the commercialized product portfolio, which are used in diverse end-user segments. Its products are sold to multinational corporations for use as additives, ingredients or intermediates that impart particular characteristics to the customer’s end-use products